Zynga Could Be Worth $7-$9B

Zynga, the developer behind the popular CityVille and other online social games, is reportedly in talks with investors about a round of funding worth $250 million that could value the company between $7 billion and $9 billion. The news of Zynga's estimated valuation comes just days after Twitter's estimated valuation was reported to be $8 billion to $10 billion. In April Zynga filed papers authorizing the issuance of new stock that valued the company at about $4 billion, according to the Wall Street Journal. Zynga, which is also the developer of the widely known FarmVille game, has been able to tap into the popularity of online games to become a profitable company after just three years in business. With 275 million users for all of its games, the company had a 2010 profit of $400 million on revenue of $850 million, the Journal reported, citing sources with knowledge of the matter. Zynga probably doesn't have a need for immediate financing because it is already profitable and previously raised $360 million from investors. Google

, the largest U.S. provider of Internet search services, is an investor in Zynga. The company is believed to have held talks with an investment bank and mutual funds about possible financing, the Journal noted. There is speculation that Zynga may file for an initial public offering in the next two years and that the company could use additional funding for its acquisitive ways that have seen the company average a deal a month for almost the past year. Separately, JPMorgan

, the largest U.S. bank by market value, said it is starting a social media fund with the hope of raising to $500 to $750 million from affluent clients to invest in tech start-ups in the social media arena. JPMorgan's fund will look to invest in “companies with established business models and steady revenues before they go public in widely anticipated stock sales,” according to DealBook.