Hometown of CityVille in image courtesy of Zynga Game.
Credit: Reuters/HandoutBy Jennifer Saba and Clare BaldwinNEW YORK | Friday 1st Jul 2011 5: 04 pm EDT
NEW YORK (Reuters) - Zynga Inc., developer of popular games of Facebook like FarmVille and Mafia wars, could be the best proxy for investment in Facebook, so that the greatest social network of worldwide public goes himself.
Zynga filed with regulators Friday for an initial public offering up to $ 1 billion, stressing that his relationship with Facebook will play a major role in its future success.
That narrow pairing is a double-edged sword. On the one hand, Zynga gets access to Facebook more than 500 million members, and Zynga keeps people returning to Facebook.
In contrast, Zynga warned in the section of risk factors for its introduction on the stock exchange filing relies on Facebook for almost all of his income and the players. "Any deterioration in our relationship with Facebook would be detrimental to our business," said Zynga.
Zynga is the Publisher of games the top on the social networking site No.1 in the world. While its games is free, income comes mainly from the sale of virtual items such as weapons which use in games and tractors.
Last year, the society of online games is close declaring war on a policy change of Facebook involving credits - Zynga currency players use to buy virtual goods. Facebook wanted to take a cut of 30 per cent of the transactions.
Gordon Bing, a veteran of the video game, Zynga Board member and a partner at Kleiner Perkins Caufield & Byers, described the deadlock at the TechCrunch Conference destroy in may as a version of the Silicon Valley of the missile crisis Cuban where Zynga was at one time prepared to walk away from Facebook.
"Facebook love decrease its dependence on the Zynga, but it is not going to Zynga, said Michael Pachter, an analyst with securities Wedbush." "" Zynga is reason for return on Facebook each day. »
So far, cut by 30 per cent of Facebook for virtual goods sold on its platform seem yet to have poorly Zynga.
"232 Million monthly active users and (income of) $ 235 million, which is $ 1 monthly active user per quarter, which is impressive," says Pachter.
In the three months that is ended March 31, the ordinary shareholders of Zynga broke out same 235.4 million revenue. Adjusted before interests, taxes and depreciation (EBITDA) was 112.3 million, 20 per cent over the same quarter a year earlier, according to the prospectus.
COMPANY SOLID, HIGH PRICE
A source earlier told Reuters that Zynga Pit could increase by 1.5 to 2 billion and the value of the company to 15 billion to $ 20 billion. Figure 1 billion Zynga gave in his introduction to calculate registration fees, and the final size of the IPO might be different.
The filing comes just ahead of the annual Conference of the Valley of the Sun next week, where Zynga founder and CEO Mark Pincus should rub elbows with bosses of media, Internet entrepreneurs and investors.
Zynga offers investors an alternative to traditional video game, including the companies share eroded in recent years. Games of Zynga, which requires no equipment, have been eating in the video game industry 60.4 billion, consisting largely of action or sports of the games played on consoles and televisions.
Consider the pillars Electronic Arts games and Activision Blizzard Inc. Sterne Agee analyst Arvind Bhatia believes that EA is trading 11 times its past four quarters EBITDA enterprise value, while Activision is commercial at 6 times. Zynga would trade at 34 times based on an assessment of $ 15 billion.
Zynga said Government U.S. beach deposit shares how he intended to sell or give an expected price.
"Of all the Internet and social media IPOs so far, we have seen, Zynga is one of the most solid, said Paul Verna, a senior analyst at eMarketer.".
"LinkedIn has not generated large profits for the moment, Pandora is uneconomic and Twitter is not ready to generate significant revenues." Zynga has much to show for it. »
Morgan Stanley, Goldman Sachs, Bank of America, Merrill Lynch, Barclays Capital, JPMorgan and Allen & Co are underwriting the IPO.
(Reports of Clare Baldwin, Jennifer Saba in New York.Liane b. Baker, in Montreal and Alistair Barr in San Francisco;)
(Editing by Lisa Von Ahn, Gunna Dickson, Robert MacMillan and Bernard Orr)
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