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Zynga Executive Summary

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Executive Summary Zynga Inc. (Zynga), is a provider of social game services with 240 million average monthly active users over 175 countries. The Company develops, markets and operates online social games as live services played over the Internet and on social networking sites and mobile platforms. The Company’s games are accessible on Facebook, other social networks and mobile platforms to players globally, wherever and whenever they want. It operates its games as live services. All of its games are free to play, and it generates revenue through the in-game sale of virtual goods and advertising. In March 2012, the Company acquired New York-based social game developer OMGPOP, makers of the cultural hit mobile game, Draw Something, and …show more content…

Then, which leads into our more long term recommendation, the strong firms in the industry tend to continue rising at a more steady and pro-cyclical rate. Zynga has a particularly strong business model that may be unseen by most investors. These reasons are that they, unlike many app based startups, do not solely rely on advertising and banner ad revenue. While this makes up a substantial revenue stream, they derive the majority of their profits from the sale of digital assets which incur little to no variable costs. Also, Zynga’s strength is, in part, tied to the strength of Facebook. Though many people disagree with the immensity of Facebook’s valuation, few would disagree with the fact that it is one of the strongest, fastest growing companies. Farmville, one of Zynga’s staple products, is and has been tied to facebook since its inception. The relationship has proven mutually beneficial for both parties and so Zynga would probably have the chance to feature another game on Facebook. If this happens around the time that Facebook goes public, (if it ever does), then Zynga’s stock should see rapid and significant growth. A major drop-off in a recent valuation has come at the realization that many of the games Zynga has are, “faddy”. This means that people love them for a small window of time and then get over them and they go unnoticed to new users. This is true and almost

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