Zynga (ZNGA) Prepares To Launch Massive IPO

Social gaming behemoth Zynga will officially launch their IPO on Friday and it’s expected to be the biggest offering for an internet based company since Google went public in 2004.

With the success of such games as Words With Friends, CityVille, and FarmVille along with dozens others the company is expected to raise $8.50 to $10 per share for a $1 billion offering and a valuation of $9 billion, far less than the $20 billion the company expected to raise when they first anticipated going public in July.

It’s still unclear how Zynga will fair in the IPO market, after going public with a valuation of $16.5 billion ($805 million IPO) last month Groupon shares fell to a valuation of $10 billion before ending on Wednesday at $22.55 (77 cents less than their IPO) with a valuation of $14.2 million.

Questions still remain about Zynga’s ability to raise revenue in the future, while they rely on virtual goods to fuel their revenue only 3% of their 240 million users actually buy items from the games they play.

On the other hand Zynga sales according to their SEC filing had nearly doubled through September with $829 million with earnings of $121 million since January 2010.

In the meantime Zynga CEO Mark Pincus has promised investors that the company is working on their “biggest-ever” pipeline of games.

The company’s IPO is being managed by Morgan Stanley and Goldman Sachs and will be traded under the ZNGA share ticker.