Social gaming company Zynga, who are behind the phenomenally successful Farmville game, have been quietly putting their paperwork in order in a lead up to the much anticipated Zynga IPO. The market has been so heated up with talk about the Groupon IPO that no one has been paying attention to Zynga. But if there was a small but well established company I would invest in, Zynga would be it.
When you look at the business model, Zynga’s revenue will never dry up because it is founded on a fundamentally human need; social interaction, just like Facebook. With the most recent addition to their stable of social games being Castleville, Zynga are evening out their revenues but creating an ecosystem of products that appeal to a wide rand of customers. The numbers show that the company’s revenues have been steadily enjoying double digit growth with only a slight dip under 10% in the quarter ending September 30.
The other reason I believe the Zynga IPO stock, which will trade under the NASDAQ ticker symbol “ZNGA”, makes for a great buy is because of the wide range of options the company has in terms of mutiplying revenue streams even in older games such as Farmville.
Owing to the tremendous amounts of time people spend playing the game, Zynga still has miles and miles of leeway to create new and innovative ways of making more money out of these players or through indirect monetization of the same. Think of Zynga as the social social gaming opposite to Facebook and what you have is a vast set of options for expansion and monetization. Through the Zynga IPO, the company hopes to raise up to $1 billion.
