Zynga Inc.

Zynga Inc. Looking for Opportunities Apart from Facebook

Zynga Inc.Zynga Inc., Online gaming company, has introduced a number of products aimed towards diversifying its company beyond Facebook and encouraging possible shareholders of their growth prospects in the flourishing social online games industry.

In their initial statement since submitting a preliminary public offering in July, the creator of Mafia Wars  and FarmVille stated Tuesday that it intends to kick off a website apart from Facebook by which gamers can gather together and have fun with its games. Zynga Inc. also introduced four new game titles with flamboyant graphics and much more advanced features, most of which could be played on mobile phones and tablet computers.

“The message to investors is that Zynga has big plans to significantly grow its business via platforms other than Facebook,” where Zynga presently has the majority of its 150 million customers, according to  Michael Cai, an analyst with Interpret, a research company in Santa Monica.

Even though Zynga reps won’t touch upon its pending IPO, analysts broadly believe that the company, similar to others for instance Groupon, is delaying up until the stock market stops convulsing.

“They filed when the market was very favorable,” according to  Michael Pachter, an analyst from Wedbush Securities. “When the market melted down in August, they realized they were no longer going to get the valuations they wanted.”

Zynga Inc. showed in public filings that it expected to increase $1 billion from the IPO, a figure that signifies that this company could be worth $10 billion or even more. Compared with Groupon, that lost $456 million in 2010, Zynga is money-making. It documented net profit of $28 million on $597 million in revenue this past year. However in the quarter that ended June 30, Zynga’s income dropped 90% to $1.4 million from $14 million a year earlier.

“The beauty of Zynga is that they generate a bunch of cash,” Pachter stated. “So they don’t need the money. And they have patient investors who can wait until the market conditions are more favorable.”
In the meantime, Zynga seems to be in shelling out mode, introducing new online games and seriously investing in technologies to flourish its reach in to mobile phone and various online platforms. Probably the most committed is a site, temporarily named “Project Z,” which the company outlined in its Tuesday news conference in San Francisco.