The high-valued social networking site LinkedIn’s IPO is already up for grabs, Groupon is likely to follow suit soon and the ever popular Facebook online games creator, Zynga has announced that the company will go public soon. The trend only shows the tremendous support and popularity that online networking companies enjoy on Wall Street.
LinkedIn's sizzling debut had created ripples across stock markets last month and the latest buzz on about the new entrant Zynga is that the company hopes to raise between $1 and $2 billion through its IPO. Zynga, creator of popular online games like Farmville, Cityville and Texas Hold’em Poker on Facebook shows revenue of $597 million and the company’s profit is reportedly pegged at $91 million and is one of the few social media networking companies that have generated profits.
More than 90% of the company’s revenue is generated from its online games where people spend real money to buy virtual stuff; and this indicates the immense attraction people have for virtual games, spurring people on to spend money to participate in the virtual games even during such economically tumultuous times.
Zynga meanwhile goes from strength to strength having acquired the Canadian mobile apps developer Five Mobile Inc. and renaming the company as Zynga Toronto. During the past year, San Francisco based Zynga has made 14 acquisitions and is set on rapid expansion before the IPO.
The Five Mobile acquisition will expand Zynga’s customer base which is already a whopping 300 million users as well as give the company a strong footing now, in Canada especially internet savvy Toronto which also has a burgeoning IT community.
Zynga IPO is expected to overshadow the LinkedIn IPO, because of its huge user base and the frenzy that recent social media companies’ IPOs have generated.