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Zynga files long-awaited IPO plan, hopes to raise $1 billion

July 1, 2011 |  9:51 am

Zynga2 Zynga Inc. finally lobbed its long-awaited bid to begin selling its shares on the New York Stock Exchange, joining an illustrious list of technology companies that have enjoyed successful initial public offerings this year, at least during the first days of their IPOs.

The 4-year-old San Francisco company -- whose social games CityVille, FarmVille, Empires & Allies and Zynga Poker make up the top four most popular applications on Facebook -- boasts more than 271 million players who have fired up one of its 57 games at least once in the last month, according to AppData.com.

Zynga's filing with the Securities and Exchange Commission on Friday follows stock offerings from a cluster of Internet companies, including Pandora Media Inc., LinkedIn Corp., Yandex and Demand Media Inc., whose lofty debut prices were reminiscent of the 1990s technology bubble that burst over a decade ago.

Pandora, the latest to go public, was initially priced at $16 on June 14, but plummeted to $12.94 by June 17 on concerns over the Internet radio company's prospects for becoming profitable. Its shares have since recovered and were trading at $20.66 at midday.

Zynga, in its filings, did not disclose a share price, the number of shares it will offer for sale or when it expects to begin offering its stock. The company hopes to raise $1 billion.

"Bankers are very aware of the Pandora fiasco and would not like to see a repeat of that," said Nitsan Hargil, senior analyst with GreenCrest Capital Management in New York. "They are likely to price Zynga much more conservatively."

Mark Pincus Zynga differs from Pandora in another key respect. The company reported profit of $90.6 million on $597.5 million in annual revenue for its 2010 fiscal year ended Dec. 31

"Zynga is a company with real revenue and real profit," Hargil said.

Founded in 2007 by Silicon Valley serial entrepreneur Mark Pincus, Zynga has built an empire out of selling virtual goods for its games.

Named after Pincus' late French bulldog, Zinga, the company amassed funding from high-profile investors such as Kleiner Perkins Caufield & Byers, Avalon Ventures, Foundry Group, Softbank and Andreessen Horowitz. Private investors include MTV founder Bob Pittman, LinkedIn Chairman Reid Hoffman and Clarium Capital Chairman Peter Thiel.

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Zynga builds an empire of social gamers

Pandora Media prices its shares at $16, above expectations

-- Alex Pham and Dawn C. Chmielewski

Photo: Mark Pincus at his home in San Francisco in 2007, the year he founded Zynga. Credit: Jakub Mosur / Los Angeles Times.

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