{"id":518587,"date":"2010-04-06T23:55:41","date_gmt":"2010-04-07T03:55:41","guid":{"rendered":"http:\/\/gigaom.com\/?p=111197"},"modified":"2010-04-06T23:55:41","modified_gmt":"2010-04-07T03:55:41","slug":"say-what-yes-you-heard-right-%e2%80%93-zynga-could-be-worth-5-billion","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/518587","title":{"rendered":"Say What? Yes, You Heard Right \u2013 Zynga Could Be Worth $5 Billion"},"content":{"rendered":"

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Zynga, the leading social-gaming company behind Facebook hits such as Farmville and Mafia Wars, would likely be worth as much as $5 billion<\/a> if it were publicly traded instead of privately held, according to SecondShares.com, a group of former equity analysts who spend their time researching the value of private online companies such as Zynga, Facebook, Twitter and LinkedIn. SecondShares<\/a> based its estimate of Zynga’s value on the number of outstanding shares, estimated revenue per user, growth rate and other metrics, and projected that by 2015 the game-maker could have a theoretical market value as high as $10 billion.<\/p>\n

The authors of the report — former Merrill Lynch and Goldman Sachs equity analyst Lou Kerner, former Sanford Bernstein research analyst Eli Halliwell and Gamers Media CEO Jay Gould — say Zynga is the leader in the social gaming market with 237 million monthly active users and 6 of the top 7 social games. That gives the company more than four times as many monthly active users as Playfish, which was recently bought by Electronic Arts<\/a> for $400 million. China’s Tencent Holdings is the only online game company that is larger than Zynga, the report says, with 400 million monthly active users.<\/p>\n

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Based on an estimate of what Zynga likely makes in revenue from the average user, Second Shares projects that the company will pull in about $500 million in revenue this year, and could be making as much as $1.6 billion per year in five years. The analysts say that shares of the company are currently trading in private, illiquid markets at about $9 a share, but would likely be worth almost twice as much if Zynga were to go public, and that Zynga has a number of strengths that justify a premium valuation, including the fact that it can cross-market games to users of other Zynga games, and that it is quickly able to duplicate other successful games that competitors come up with.<\/p>\n

As with Facebook, Twitter, and other high profile private companies, you can buy Zynga shares in the (illiquid) private market, where about $6 million worth of shares traded hands last year through marketplaces like SecondMarket.com. Only accredited investors are allowed to participate. Currently, the ask price is about $9\/share, implying a market cap for Zynga of $2.8 billion. <\/p><\/blockquote>\n

Toward the end of its research report, however, Second Shares mentions a number of potential risks for Zynga and its valuation, including:<\/p>\n