Based on unnamed “sources,” yesterday TechCrunch reported that Google had “secretly” invested more than $100 million in social gaming platform Zynga and is launching “Google Games,” built partly on Zynga.
Let’s establish all the usual qualifiers; this is an unconfirmed story and so on. And there are plenty of times when these TechCrunch-surfaced rumors turn out to be wrong. But this one seems to be supported by a job posting (“Product Management Leader, Games – Mountain View“).
Given that, here are the main elements of the TechCrunch story beyond the headline itself:
- The Google investment in Zynga is “between $100 million and $200 million”
- The investment was completed “a month ago or so”
- “Zynga will be the cornerstone of a new Google Games to launch later this year”
Then there’s further speculation that gets more interesting:
- “It will also give Google the beginning of a true social graph as users log into Google to play the games”
- PayPal could be replaced with Google Checkout “as the primary payment option”
Zynga recently announced a partnership with Yahoo that could serve as a kind of template for the Google relationship. Zynga also launched FarmVille, one of its most popular games, on the iPhone. These efforts are a part of a broader move for the company to “diversify” and become less dependent on Facebook — to which it owes its initial success.
Given that there’s not exactly a “search angle” here, I’ll be concise about what I find fascinating about this story.
During the heyday of Second Life, Google started and later shuttered its own “virtual world” — a kind of open-ended social game — called Lively. While it would be difficult for Google to build a credible gaming site from scratch, Zynga potentially jump-starts a Google Games quite effectively. Beyond that consider “Google Games” played on “Google TV.”
The idea that social gaming becomes a backdoor into the “social graph” for Google is fascinating. When considering the anticipated rebirth of social networking at Google (“Google Me”) I opined that Google needs to either put together a great product, more elegant or functional than Facebook, or come at social networking from a different angle:
[W]hat capabilities or services or tasks does it offer or enable that Facebook doesn’t or can’t? Because if Google Me can’t answer the “why question” it’s DOA.
Clearly Facebook offers social games. But gaming might be part of that different approach for Google. I’m sure that gaming isn’t the alpha and omega of Google Me (groups also appears to be part of the strategy). However it could be a useful “contributor” to a social network.
Then there’s the Google Checkout angle.
Google’s payments platform remains a missed opportunity for the company, and for Android to some degree. Google failed to market the service to consumers when it launched and it has made limited inroads vs. PayPal. However it’s a service that still has enormous potential for Google if it can gain consumer adoption. Tying it to a popular gaming site, which is speculation built upon speculation, could give Checkout a meaningful and perhaps even material boost.
In summary, the hypothetical “Google Games” offers a range of potential benefits for both Google and Zynga. These include additional independence for the latter from Facebook and several opportunities for Google around payments and the social graph. We’ll see if any of it happens.