While the company has been accused of borrowing heavily from predecessor games, there is no denying the fact that Zynga is an expert at applying social gaming mechanics at a scale unlike any other company. Farmville alone now attracts over 100 million unique users per month, just 10 months after it launched.

In a short amount of time, Zynga has developed worldwide hits such as Farmville, Café World, Mafia Wars, Petville, and Fishville. While Zynga got its start with social versions of already-proven gaming titles such as Risk, Battleship, Boggle, Blackjack, and Texas HoldEm Poker, it quickly applied what it learned about these new gaming experiences to create its own franchises.

Zynga has almost 5 times more players than Electronic Arts, its closest competitor. Indeed, playing games is one of the most popular activities on Facebook, up there with looking at profiles, sharing photos, and “liking.” As you can see from information I pulled from AppData, Zynga’s 246 million unique users per month means that over half of Facebook users are playing Zynga’s games. Zynga is the leading producer of online casual social games that can be played with friends and family across the leading social networks, on mobile phones, and now on the web. In this teardown, I will detail how Zynga achieved its rapid success and dive into the key challenges facing the company. If it cannot do so, its attractive revenue and profitability metrics are certain to be impacted. Zynga is under significant pressure to make a series of strategic moves to ensure its continued success. Two, Zynga’s complicated relationship with Facebook means the company has less control of its own destiny. Based on my estimates, Zynga is likely making a 30% net margin on $50 million in revenue a month, or close to $15 million in profit a month.

One, Zynga has generated the highest revenue and profitability numbers of any startup ever in such a scant amount of time (more so than even Facebook itself to date). There are two significant traits that distinguish Zynga from its comparables, however. Like YouTube, Twitter, and Groupon, social gaming pioneer, Zynga is a member of the “fastest from founding to $1B valuation” club, having earned its membership in just 19 months. His last guest post was a teardown of group buying site Groupon. Carpenter was the founder and CEO of Cake Financial, which was sold to E*Trade earlier this year.

In this guest post, entrepreneur Steven Carpenter does a teardown of Zynga’s business model and calculates an estimate of its profits. Editor’s noteSocial gaming site Zynga is making money hand over fist, but it also is facing new challenges in its relationship with Facebook.

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