Zynga May Be Valued at $1 Billion on Facebook Craze (Update1) - Bloomberg.com - http://www.bloomberg.com/apps...
Nov 24, 2009
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"Zynga Inc., maker of the “Mafia Wars” and “FarmVille” games played on Facebook, may be valued at $1 billion based on the sale price of a smaller rival."
- Frankie Warren
This valuation seems way out of line... First, Facebook itself isn't valued at that much more. Second, I don't think the valuation can just scale the way the article describes. Third, these online games suffer from massive amounts of churning in which all their revenue goes into advertising to get more users. Finally, some of their practices are dubious at best: "Some of those offers on Zynga games have turned out to be misleading. An example is when a player is offered to receive more game currency in exchange for filling out an IQ quiz. A user will enter a mobile number to receive the survey’s results and unwittingly sign up for a subscription that will be added to their monthly bill."
- Frankie Warren