Zynga IPO may value it at $10 bn

Zynga announced plans yesterday for raising $1 billion in an initial public offering, that would make it the first publicly traded company whose profits depend on the sale of virtual goods.

The San Francisco startup with popular games for Facebook including "CityVille," "FarmVille" and "Empires & Allies" though, has not disclosed the number of shares to be offered or the price at which they would be sold.

The offering implies a valuation of $10 billion and The Wall Street Journal, citing people close to the situation reported the IPO could raise as much as $2 billion valuing the company at $20 billion.

 In a letter to prospective investors, Zynga founder and CEO Mark Pincus said gaming was fast becoming the core function of the internet and connected devices.

"Play is one of life's big macros - it's an activity people love to do and do often," he said. "Zynga was founded on a deeply held passion for games that family and friends play together - connecting, collaborating, gifting, bragging, nurturing, admiring and sometimes just doing silly stuff together."

However, the fact that gaming is now serious stuff can be appreciated from the figures the four year old company, whose popular games run primarily on Facebook's platform has chalked up.