Zynga Inc (ZNGA) Shares Jump On Yahoo Acquisition Rumors

On Monday, shares of online social game maker Zynga Inc (NASDAQ:ZNGA) jumped to highs last seen in July on news that Yahoo! Inc. (NASDAQ:YHOO) may be interested in purchasing the company.

In mid-morning trading, shares had increased 7.9 percent to $3.85 after hitting $3.90. Year-to-date through Friday, the stock has been up 51 percent.

The potential acquisition comes as Wunderlich Securities Inc. analyst Blake Harper wrote in a Monday research report that Yahoo! Inc. (NASDAQ:YHOO) could consider a Zynga purchase as Chief Executive Officer Marissa Mayer looks to acquisitions to increase the company’s portal’s mobile and social capacities.

Since Mayer has been at the helm, Yahoo has given up market share in its display advertising core business thanks to increasing competition from Google Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB).

Zynga Inc (NASDAQ:ZNGA) currently has a $3 million market value and it could be an attractive option if Mayer is interested in deals valued at greater than $1 billion, wrote Harper. He also suggested that Yahoo may also look at food- review sites including Yelp Inc (NYSE:YELP), OpenTable Inc (NASDAQ:OPEN), or Millennial Media, Inc. (NYSE:MM), which includes mobile advertising.

The above-mentioned companies have not commented on the research report.

Just last week, Jackie Reses, Yahoo’s Human Resources/Mergers and Acquisition chief said that the company was pursuing two “significant” acquisitions to go along with its six small “acqui-hires,” reported Kara Swisher from AllThings D. So far Yahoo’s acquisitions under Mayer’s rein have been smaller but biggest transactions have also been considered.

Swisher further noted that Yahoo! Inc. (NASDAQ:YHOO) has been looking at different acquisitions across broad categories including advertising tech, mobile monetization and “daily delight”–allegedly a phrase used by Mayer a lot.

In addition, Swisher tossed out Pinterest, the online scrapbook, as a possible target. It was recently valued at  $2.5 billion after a new round of funding. Mayer has also appeared interested in Tumblr–also during her time at Google–and she also likes the location app Foursquare.

As for Mayer’s job performance, the company appears happy with it to date. Yahoo! Inc. (NASDAQ:YHOO) recently awarded her a $1.12 million bonus and restricted stock worth $13.3 million from just five and a half-months in the top spot, according to an SEC filing on Wednesday. In 2013, Mayer, who joined the Internet giant in July 2012, will receive a $1 million base salary; this is the same as 2012′s salary but she will receive a cash bonus of up to $2 million in 2013.

Looking at share prices on the acquisition news, Zynga Inc (NASDAQ:ZNGA) is still trading higher as its up 9.24%, trading at $3.90 while Yahoo! Inc. (NASDAQ:YHOO) is down 0.90%, trading at $22.70.

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