Rumor Mill: Zynga IPO Worth Between 15 and 20 Billion Dollars

Social game developer Zynga is rumored to be preparing an Initial Public Offering on the stock exchange that will be worth between 15 and 20 billion dollars, with investment bank Goldman Sachs set to handle the financial matters.

Sources that are familiar with the IPO efforts from Zynga have told financial-oriented new channel CNBC that Zynga is preparing all the necessary documents and that they might be submitted to the Securities and Exchange Comission as soon as this week, with the date for the IPO set for the fall.

Zynga is best known for creating video games like CityVille, FarmVille and Mafia Wars, which are played using the Facebook social network.

The games are free to play in that they do not require a monthly subscription, but players can buy various objects, some purely cosmetic and some linked to gameplay, using real world money.

As the games have become more and more successful, being some of the most used Facebook applications, the market value for Zynga has also grown, with some saying that the company is worth around 10 billion dollars.

The rumored IPO is expected to bring in between 15 and 20 billions, depending on the interest from investors and the first day performance on the stock market.

Rumors of an IPO have been corroborated with a move from Zynga to negotiate a deal with the administration of San Francisco, where it is based, that would exempt it from payroll tax.

Recently, the company also hired John Pleasants from Electronic Arts for the position of Chief Operations Officer.

The close to 20 billion dollars evaluation for Zynga might be yet another sign of a technology bubble on the American stock exchange.

The company makes very successful games, but it's not clear exactly what revenue it derives from them and how long their popularity can be maintained.