Zynga to buy Facebook game maker Serious Business

NEW YORK Thu Feb 11, 2010 3:56pm EST

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NEW YORK (Reuters) - Zynga said on Thursday it would buy Serious Business as the online game provider, often seen as a top IPO candidate, expands its stable of social games on Facebook.

Zynga, known for games including "FarmVille" and "Mafia Wars," did not disclose the terms of the deal for San Francisco-based Serious Business, whose game "Friends for Sale!" is played by more than 6 million people each month.

So called social games are seen as a growth area in the global interactive software industry, as millions of users flock to the games, which are mostly free to start. Users typically pay small fees to add features to a game.

Late last year, Electronic Arts Inc ERTS.O, a market-leading publisher of videogames such as "Madden NFL," agreed to pay $275 million in cash for Playfish, maker of the popular game "Pet Society."

Bloomberg reported on Thursday that CrowdStar, which attracts 51 million users a month to its range of Facebook games, including Happy Aquarium and Happy Pets, was in talks with potential buyers, including Microsoft Corp (MSFT.O). Both companies declined comment.

Zynga boasts more than 235 million monthly active users playing its games on Internet social networks such as Facebook and MySpace and profits by selling add-on tools. The game "FishVille," for example, lets players buy virtual food and goods with game cash bought with real-world dollars.

Virtual goods account for 90 percent of Zynga's revenue, which has been estimated at $300 million on an annualized basis.

Analysts expect the technology sector to produce a number of initial public offerings in 2010 and have speculated Zynga could raise more than $1 billion in an IPO.

(Reporting by Franklin Paul; editing by Lisa Von Ahn and Andre Grenon)

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