'FarmVille' creator Zynga to go public; IPO expected to raise $1 billion

Zynga has opened the ba door to Wall Street.

The company that lets you grow virtual tomatoes and breed fantasy sheep in \"FarmVille\" is going public, becoming the latest in a string of hot stock debuts by social media companies.

Zynga, based in San Francisco, hopes to raise up to $1 billion in an initial public offering. It follows LinkedIn's successful stock market debut last month.

The amount of money Zynga seeks could change, though, when its bankers determine how many shares should be sold and at what price. That process typically takes three to four months.

There's pent-up demand for stock in large social media companies because so few of them have gone public as their reach and popularity grew.

LinkedIn, an online career site, doubled its IPO price on its first day of trading last month to nearly $9 billion. Groupon, a discount provider, filed for an initial public offering in June that could value it at more than $20 billion. Investors eagerly await the IPO for Facebook, considered the sexiest and most successful social media site. The company is expected to go public in 2012.

Yet, the failures of other online businesses show how fleeting are the fortunes of once 'hot” sites. News Corp. this week sold the struggling Myspace for a paltry $35 million after paying $580 million in 2005.

Zynga is expected to attract great interest because Zynga games have become a large cultural phenomenon. About 230 million people each month play Zynga games such as \"Farmville,\" \"CityVille\" and \"Texas HoldEm Poker.\"

The company makes most of its revenue by charging small amounts of money to buy virtual items in its games. It also makes some money from advertising and partnerships with companies such as Netflix or Vistaprint. Revenue jumped from $121 million in 2009 to $597 million in 2010.

Zynga depends on Facebook's audience of more than 500 million users, and tailored its games for them. Zynga games give people another reason to keep make frequent visits to Facebook so they can tend to virtual livestock, build virtual buildings and play online poker.