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Google investing over $100m in Zynga for Google Games?

updated 04:15 pm EDT, Sun July 11, 2010

Google now dipping into web game efforts

Multiple sources late Saturday slipped word that Google has been investing in Zynga to create its own web game platform. Google is believed to have invested at least $100 million and as much as $200 million into the FarmVille creator in June and is now developing a "larger strategic partnership," according to TechCrunch. The move would create Google Games, a hub for web gaming where Zynga would be the cornerstone of a larger network.

The development would be important both financially and strategically for Google. Zynga is estimated to generate as much as $1 billion in revenue in 2011 and could add a significant revenue source outside of search. It would also give Google a much more detailed social map of its users' habits, as visitors would have to sign into a Google account much more often, and would open an opportunity to steal market share from PayPal for the somewhat struggling Google Checkout.

Neither Google nor Zynga has confirmed the plan, but Google currently has a job listing for a Product Management Leader in the currently non-existent Games group, validating at least some of the claims. The post doesn't provide any clues of its own as to what Google Games might involve.

The deal may be an attempt to head off a control of the web by Facebook. Zynga is by far the social network's largest source of paid business and has helped keep many visitors on Facebook, reducing not only Google's ability to gauge users' behavior but depriving them of ad revenue. Facebook in turn recently launched code that lets websites embed code to "like" sites and otherwise tie them to Facebook without having to leave the page, giving Facebook a much larger footprint on the overall web.

by MacNN Staff



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