News over the weekend discussed about how Google has directly invested in Zynga in preparation for launching Google Games, which may form part of the social element of the rumoured Google Me platform.
What makes it interesting is that Google has the cash to buy the company outright and usually does in most cases, so why just take a partial share? The pre-IPO analysis of Zynga by Second Shares places the value of Zynga at around $5 billion, so why did Google buy such a low amount of shares if the reports are correct of a $100-200 million investment?
The news was broken by a Zynga's chief engineer Allan Leinwand, over twitter which was of course later deleted... this begs the question do people think before tweeting confidential meetings and if they are in a position of responsibility do they think no-one reads their tweets. Around the web various blogs and magazines have thrown their weight behind story, which is still not officially confirmed by Google or Zynga.
- PC Mag - Zynga to Fuel an Epic Google-Farmville Mashup
- TechCrunch - Google Secretly Invested $100+ Million In Zynga, Preparing To Launch Google Games
- Venture Beat - Google quietly invests more than $100M in Zynga and prepares Google Games launch (confirmed)
- Gigaom - Are Google and Zynga Working on a Gaming Deal?
As TechCrunch correctly points out there are current US openings at Google for Games, the two roles are based in Mountain View, USA.
The interesting point is that Google has hired plenty of staff roles for projects that never see the light of day outside internal alpha testing and some projects such as new email platforms are not yet ready for the market. Looking at the first of the two advertised roles, one of the key responsibilities of the product management leader is "Engage closely with the engineering team to help determine the best technical implementation methods as well as a reasonable execution schedule". That would indicate that internally Google doesn't yet know how its going to build the platform, how its going to tie the product into its existing platform and even what the roadmap to launch would be.The second role developer advocate focuses on a key part of the role being "You will also propose and advocate new technologies internally to improve Google’s offerings to the game development community", so that would lend more weight to the argument that Google is building its own gaming platform internally and is working to please the game developers for a longer term relation more than just focusing on buying Zynga.Paypal Replaced with Google Checkout?
- Product Management Leader, Games
- Developer Advocate, Games
The only point I can see incorrect is TechCrunch who bring up the idea that Zynga could replace PayPal with Google Checkout. That type of action would surely have the regulators and competition watchdogs jumping for the noose, I assume Google wouldn't be so short sighted as to make a small investment and then force the company to adopt its Google Checkout platform. A move like that would likely annoy competitors as much as it would Zynga users.
Zynga creates the perfect storm
So Zynga is being smart by partnering with multiple platforms as it is making for a case of being the default game platform where users can play and get game notifications across Google, Facebook, Myspace, Yahoo and on your iPhone. It is fair to say that Google would be interested in establishing a licensing or access relationship with Zynga but it hardly seems a one stop solution for their entire future strategy around online gaming. As Google has seen with Twitter and Facebook, the problem is that if everyone gets a deal with Zynga they lose their exclusive content advantage and they can potentially create a new competitor they have to worry about.