Seeking Alpha thinks Zynga should buy Glu Mobile

One to file under speculation - certainly when it comes to the price - but financial website Seeking Alpha has been pondering the acquisition of Glu Mobile (NASDAQ:GLUU) by Zynga.

In some ways, a deal would work well for Zynga, giving it a pure mobile, freemium business with annual revenues of around $65 million.

Still, the integration of a loss-making business with a headcount of around 600, that's undergoing substantial restructuring itself following the acquisition of Blammo Games and Griptonite Games, may not be what's most sensible as Zynga deals with the rocky road to its IPO.

Apples and pears

What's more interesting though is the proposed price of a deal. Taking a PopCap-style 13 times revenue valuation, it's argued Glu could be worth up to $975 million.

Obviously, the difference is PopCap is highly profitable while Glu is highly loss-making.

It's also seen its share price drop in recent market instability: at time of writing Glu's market cap is $209 million, valuing it at 3.2 times revenues, rather less than the 8 times - or $600 million - valuation Seeking Alpha thinks is fair.

[source: Seeking Alpha]