Keep in mind that Zynga is not a publicly traded company and this valuation is based upon what people are spending for shares or stake in the company. This is similar to when Microsoft dropped $240 million into Facebook for a 1.6 percent stake in the social network, valuing Facebook at $15 billion.
Zynga might not actually be worth $5.51 billion, but at least some people think it is and when dealing with that stock market, that's usually enough. "The valuation is not that crazy, given what's going on in the market," said Atul Bagga, an analyst at ThinkEquity LLC. "It's not that terribly expensive seeing the growth prospects." Bagga "estimates the virtual goods market may reach $3.6 billion in three years," according to Bloomberg.
Activision Blizzard is currently sitting at $13.9 billion valuation, while China's Tencent Holdings Ltd. comes in at a whopping $43 billion. FarmVille's success continues to mystify me. It's no Cow Clicker, though.