Oct 11, 4:41 PM EDT

Zynga adding more ways to play games as IPO looms

By MICHAEL LIEDTKE
AP Technology Writer

SAN FRANCISCO (AP) -- Zynga is adding more ways for people to play its Web games as it grooms its business for an initial public offering of stock that is aiming to raise $1 billion.

The expansion announced Tuesday served as part product announcement, part coming out party for Zynga Inc.

Since it launched four years ago with a version of "Texas Hold `Em Poker," Zynga has created entertaining diversions for 232 million players worldwide, largely on Facebook and other social networking service. Those games have also become an annoyance for millions of other people subjected to their online friends' pleas for help in building virtual cities and farms.

In a step toward becoming more compelling to its users and less intrusive to outsiders, Zynga is working on its own online playground. That service, currently called "Project Z," means Zynga's users won't have to flock to social networks to play games such as "CityVille," "FarmVille" and "Mafia Wars."

Several new titles are being added to the game line-up, including "CastleVille," "Dream Zoo" and "Bingo." Zynga is inserting the Bingo game in a new online casino that will become the home for its poker games too.
Zynga didn't set a target date for when its own game-playing destination will be available. The company, which is based in San Francisco, also didn't say whether it believes the alternative site will lessen its dependence on Facebook, the main place where Zynga's games are currently played.

The appetite for Zynga's IPO has been fed by its connections to Facebook and the online hangout's 800 million users.

Project Z will still draw upon Facebook's massive audience because Zynga's website will still require a Facebook account to log on. Zynga also is offering three games that can be played on iPad software that Facebook began distributing Monday.

But Zynga didn't say whether Project Z will serve as a way to avoid sharing as much of its revenue with Facebook.

Zynga games are free, but the company charges for virtual items that can speed up or improve play. Facebook charges a 30 percent commission when Zynga users buy such items while playing on Facebook's website.
It's doubtful Zynga founder and CEO Mark Pincus would do anything to jeopardize Zynga's relationship with Facebook, given the stakes riding on its IPO.

Zynga's fortunes ride on Facebook, as its own IPO documents make clear. "We generate substantially all of our revenue and players through the Facebook platform and expect to continue to do so for the foreseeable future," Zynga said in its papers, which were filed more than three months ago.

The interest in Internet IPOs has been waning as investors have become more nervous about taking risks in a global economy struggling to overcome huge government deficits and stubbornly high unemployment rates.

Groupon, an online coupon provider that once tantalized Wall Street, still hasn't gotten to the point of pricing its IPO, even though it filed its IPO papers a month before Zynga did.

Unlike Groupon, Zynga is profitable. It earned $18 million on revenue of $522 million during the first half of this year.

News from The Associated Press