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Zynga Said to Pay $200 Million for ‘Draw Something’ Creator

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Zynga Is Said to Pay $200 Million for ‘Draw Something’
Zynga Inc. signage and logo are displayed on the facade of the company's new headquarters in San Francisco. Photographer: David Paul Morris/Bloomberg

March 21 (Bloomberg) -- Zynga Inc. agreed to acquire OMGPOP Inc., adding the popular application “Draw Something” to its portfolio of games played on Facebook Inc. and Apple Inc. iPhones.

Zynga will pay about $200 million for the startup, said a person familiar with deal, who asked not to be identified because the terms weren’t made public. OMGPOP will remain headquartered in New York, the companies said in a statement, which didn’t disclose the purchase’s financial terms.

The biggest maker of social games is stepping up spending on acquisitions after paying a combined $147.2 million for 22 companies in 2010 and 2011. Zynga, which raised $1 billion in a December initial public offering, aims to lessen its reliance on Facebook, accounting for more than 90 percent of its sales.

“They have done a lot of acquisitions of small game companies along the way,” said Brian Blau, research director at Gartner Inc. “Most of those acquisitions were for talent rather than titles. This is a case where they are buying a title” already popular with users, he said.

OMGPOP’s “Draw Something,” a game where users take turns guessing what their friends draw, has 22.4 million monthly users on Facebook, according to the website AppData. A mobile version for iPhones and iPads released in February is currently the most popular program in Apple’s App Store.

Adam Isserlis, a spokesman for San Francisco-based Zynga, declined to comment on the price of the acquisition.

Facebook takes a 30 percent cut of virtual goods sold in Zynga’s games. Earlier this month, Zynga took the wraps off of Zynga.com, a game-playing hub separate from the social network.

In 2010, Zynga acquired Newtoy Inc., the developer of the mobile application “Words With Friends,” for $53.3 million, according to a company filing.

Zynga shares rose 2.5 percent to $13.72 at the close in New York. The stock has climbed 46 percent this year.

Technology blog TechCrunch reported earlier this week that Zynga could pay between $150 million and $250 million to acquire OMGPOP.

To contact the reporter on this story: Douglas Macmillan in San Francisco at dmacmillan3@bloomberg.net;

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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