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Social games maker Zynga, the developer behind smash hits like FarmVille and CityVille, filed for an initial public offering today, according to a filing with the securities and exchange commission.

Zynga has since become a Facebook distribution powerhouse like no other game company. That makes it a lot easier for Zynga to generate revenue, since a percentage of users usually pays for items in otherwise free games. The company has delivered hit after hit to Facebook.

Zynga’s latest social game, Empires & Allies, is another hit for the company. It attracted more players than FarmVille, the company’s first breakout hit, in just 25 days. Empires & Allies is gaining new users at a rate of a million a day and 8 million a week now, according to AppData.

The company is the fourth high-profile Web 2.0 company to file to go public in the past several months. Business social network LinkedIn also recently made its debut on the New York Stock Exchange (NYSE), soaring to a valuation of nearly $9 billion during its first day of trading before backpedaling to a more reasonable $79 share price. Group-buying site Groupon also filed to go public earlier this month.


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Here’s a breakdown of some of the highlights in Zynga’s S-1 filing:

Revenue: Zynga brought in $598 million in revenue last year, up 391 percent from $122 million in 2009. The company also brought in $235 million in revenue in the first quarter this year, up 133 percent from $101 million in revenue in the same quarter a year earlier.

Profit: Zynga is by far the most profitable company to file to go public this year. The company made a $90 million profit in 2010. It made a profit of $11.8 million in the first quarter this year, up 84 percent from $6.4 million in the first quarter of 2010.

Cash: The company has nearly $1 billion in cash. It had $738 million in cash at the end of 2010.

Research and Development Costs: Zynga’s costs for creating new games rose quickly. Zynga spent $71.8 million on research and development in the first quarter this year, up 158 percent from $27.9 million in the first quarter of 2010.

Marketing Costs: Chances are you’ve seen a billboard advertising one of Zynga’s many games. That’s because Zynga’s marketing costs have risen the most quickly when compared to all its other costs. The company spent $114 million in 2010, up 170 percent from $42.3 million in 2009. Zynga spent $40.2 million on marketing in the first quarter this year, up 130 percent from $17.4 million in the first quarter of 2010.

Users: Zynga said it has 60 million users that play its games on a daily basis. It has more than 230 million monthly active users across all its games.

Virtual Goods: Zynga is no longer relying on advertising as a core source of revenue, with the sale of virtual goods dominating its revenue. The company said it sells 38,000 virtual items every second. Zynga made $575 million in revenue off the sale of virtual goods in 2010, compared to $22.8 million in advertising revenue.

Infrastructure costs: The social gaming company spent $119 million on servers and computing equipment in the first quarter this year. The company only spent $84 million on computing equipment in all of 2010.

Advertising: Zynga’s revenue from advertising fell 36 percent between 2010 and 2009.

Salary: CEO Mark Pincus, despite owning a dominating number of shares of the company, still has a yearly salary of $300,000.

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