Social gaming giant Zynga eyes $US10 billion float

The next big social media IPO could be just weeks away, with social gaming giant Zynga reportedly preparing to float in June with a valuation of at least $US10 billion and probably much more.

According to highly-respected tech blog All Thing Digital, Zynga – the company behind Facebook games FarmVille and CityVille – will file for an IPO this week or next week at the latest, ahead of a listing on the New York Stock Exchange in June.

While the company’s latest round of funding – it raised about $US500 million in early March – valued it at $US10 billion, the valuation in a public float is likely to be much higher.

The company’s investors and its founder, Mark Pincus, would be brimming with confidence about the market’s appetite for social media stocks after the huge success of LinkedIn’s float a week ago.

LinkedIn was floated on a valuation of $US3.2 billion, but furious buying saw its stock double on the first day of trade, pushing its current market capitalisation to just under $US9 billion.

Zynga is arguably a much bigger and more profitable business.

Compared to LinkedIn, which has about 100 million issuers, revenue of $US375 million and earnings of about $20 million, Zynga is giant.

The company claims that it has 250 million people actively playing its games every month and last year it is believed to have generated a profit of $400 million based on revenue of $800 million.

According to All Things Digital, the IPO documents will reveal even more “robust” financial data for the 2011 year.

Zynga, which was named after founder Mark Pincus’ bulldog, Zinga, was established in July 2007 and has grown rapidly in the last 12 months, with more than 800 people hired in the last 12 months.

Pincus hasn’t been shy about the company’s strategy, reportedly telling employees: “You’re not smarter than your competitor… just copy what they do and do it until you get their numbers.”