The prolific Facebook game developer has been valued at 10 billion dollars according to a recent report in the New York Times. With the company remaining in private hands, at least for the time being, the new net-worth evaluation comes after recent fundraising and investment capital totaling 500 million were injected into the company via two Wall Street heavyweights – T. Rowe Price and Fidelity Investments. With a similar deal made between Goldman Sachs and Facebook, there is no doubt that a second rebirth in investment and speculation of net based companies could be leading to a second dot-com bubble.
Zynga’s games, which include the popular Cityville and Farmville, represent a huge portion of traffic on the social network with 275 million players each month across all of the games they offer. With 9 studios (Yes, 9: San Francisco, India, China, Austin, Boston, Japan, Germany, Dallas, and New York), and plans to consolidate all of their games on their own social platform dubbed Zynga Live, the potential for growth following a public offering and a subsequent breakaway from Facebook is what is attracting the rampant investment speculation and the subsequent high worth evaluation that comes along with it.
This investment capital raised by Zynga is certainly nothing new for the company, who in the past has seen money from Digital Sky Technologies and Google, but when coupled with new hires made within the company it seems to signal a transfer from the public to private sector is coming sometime in the near future. The report in the New York Times indicates that according to sources within Zynga, the staff will be doubling in size this year from 1,200 employees to somewhere near 3,000, making the acquisition of more development studios the probable destination for a majority of the new investment dollars.
It is uncertain what the long term viability of the Zynga and Facebook business models hold, but for the time being these companies represent huge investment opportunities for firms on Wall Street. Who knows, in 10 years it could be Zynga-Blizzard releasing the next World of Warcraft expansion.