Zynga IPO goes north, a big dip in the graph on first day of trade – Part 2

The company’s main stream business is virtual commodities sale on FarmVille, like tractors, land, seeds and whatnot. These articles though make a huge sum of money for Zynga, many tout it as non-existent.

However, this is a propaganda created by some tech and trade geeks. FarmVille tractor is no more virtual than a 1000 songs on iTunes. Many businesses make their profits from e-commerce, thing of e-books at Amazon and various applications at Apple’s App Store.

However, the most unreliable aspect of their business is their almost complete dependency on Facebook. Although the company is making huge profits from The Social Network, Facebook has made a lot of changes in its business with third party applications and
unfortunately Zynga falls in that category.

These sudden changes have inflicted severely on Zynga’s operations and therefore profits. There is no denying the fact that this will happen again as the social network is the process of a complete overhaul of its website.

The interesting and probably the most important fact is that Zynga’s performance will directly affect Facebook in the coming days. The social network has announced its intentions to go public. Their initial plan was to announce IPO in December but due to
a series of unfortunate events it has been postponed to next calendar year.

Zynga registered with Securities and Exchange Commission in June this year with is plans of IPO in the last quarter of this calendar year.

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Posted by Usman Khalid on Dec 17 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry