Google is the 800 pound gorilla of the internet, but despite its prominence, it doesn't have a large footprint in some of the internet's most lucrative emerging markets, such as online gaming. But it might be looking to change that.
On Saturday, TechCrunch's Michael Arrington reported that Google has "secretly invested" $100m to $200m in Zynga, the maker of some of the internet's most popular social games, including Farmville and Mafia Wars. According to Arrington, the investment is related to a new product Google is creating with Zynga's help: Google Games.
Zynga will be the cornerstone of a new Google Games to launch later this year, say multiple sources. Not only will Zynga’s games give Google Games a solid base of social games to build on, but it will also give Google the beginning of a true social graph as users log into Google to play the games
While there's no guarantee that Google will be able to successfully leverage its search engine dominance to build a popular entertainment destination, the fact that the company is apparently going to try to do so highlights Google's increasing focus on lucrative verticals. Vertical search, of course, is not exactly a new trend. But to keep up, Google is making big bets to ensure that the vertical search experiences it creates are compelling. Its $700m cash acquisition of ITA Software is the perfect example of this.
But Google Games, as described, would obviously not fall under the category of vertical search. It's a consumer entertainment destination. Google's track record in building out successful consumer internet properties is spotty at best; not everything Google touches becomes gold.
If the reports of a Zynga investment are accurate and Zynga does indeed serve as a foundation for Google Games, some of the challenges in building a viable gaming property might be reduced for Google. But online gaming is a competitive market, and consumers have an abundance of choice. For Google to succeed, it would likely have to add some special sauce of its own that makes Google Games unique.
Whether this is an endeavor Google should even attempt in the first place, however, is questionable. It's worth remembering that Google started its rise to the top during a period when competing search engines had already morphed into 'portals', or were busy morphing into them. Yahoo, MSN and AOL, for instance, all had gaming properties when Google burst onto the scene. And there were big acquisitions as well. In 1999, for example, Lycos purchased Gamesville for over $200m. Arguably, few of these bubble-era portal gaming initiatives and acquisitions proved to be successful.
To be sure, the online gaming space is much more mature today, and thanks to the booming virtual currency market, much more lucrative. But it's hard not to think that Google's interest in building out a gaming destination is a little bit reminiscent of the major portals' desire in the late 1990s and early 2000s to tap into all the hot spaces on the consumer internet. The question now is whether or not Google can succeed where they failed.
Photo credit: tarikgore1 via Flickr.