In a recent post on investment advice site The Motley Fool, Matt Koppenheffer tries to tamp down the enthusiasm investors might have for the company's seemingly inevitable initial public offering. Koppenheffer's three main arguments:
Zynga CEO and founder Mark Pincus is kind of sleazy: To support this, Kopenheffer cites Pincus admitting he did "every horrible thing in the book" -- including accepting ads from Spyware like the Zwinky toolbar -- to make revenue quickly in the early days of the business. "I'm not sure he's the kind of CEO I'd feel comfortable investing in," Koppenheffer says.
Competitiors are getting in in a big way: While Zynga may have been the first ones to strike it really big in the social games space, their success has attracted the attention of some big players. Major game publishers like Electronic Arts, Take Two and Atari are bringing their brands to Facebook, and Chinese companies like The9 and Shanda Interactive are prepared to make a big push for Zynga's business.
Tried and true companies are safer than the "next big thing": While investors are always eager to jump on to trends, research shows well-established companies like Altria and Coca-Cola tend to do better than flashy start-ups, in the long run.
So is Zynga the next Google or the next Pets.com? Let us know what you think in the comments.