There ar e two spe ctres looming over Googl e’s investment in Zynga: Facebook and Apple.
Such is the threat of facebook that both Google and Yahoo are turning to Zynga to stay competitive. Google’s investment in Zynga and potential launch of a games vertical seems to be a defensive move against both competitors which I don’t anticipate yielding big results. Here’s a short history of games on Facebook. People like Facebook for pictures and friends. After 5 minutes they’re done. They’re looking for something else to do, and to connect to their high fidelity social net and games are good for that. Furthermore games on Facebook open up a whole new older and international demo to games. Zynga builds a good monetization funnel, spends tons on Facebook, and thus a symbiotic relationship is born.
So if I am a large Internet property like Google or even Yahoo do I want games too? Will that equalise me with Facebook? I doubt it. Google and Yahoo are where people consume and do functional tasks, not connect with friends. On Google they hope you leave by default because you’re clicking a link. I have 300 friends on Facebook but 2,500 contacts in Gmail. I don’t want to play social games with [email protected] just because they’re in my email list. And just because I like playing a game on Facebook doesn’t mean I want to play the same game elsewhere.
Facebook doesn’t work because of Zynga. It’s obviously the other way around. You can take a nerdy kid and buy him the same cool Nike’s and Ed Hardy shirt as the cool kids, but that doesn’t make him cool.
But in terms of mobile and Android it’s a savvy move although it shows how far the Android platform needs to go. The Android app platform is pretty lame compared to Apple, especially on the game side. I know we read about the thousands of apps and daily activation of Android phones. But if you buy a Droid and play with it, you will see that the majority of the apps just plain stink and the experience of buying and browsing is pretty bad. On the one hand if Google can draw in Zynga to the platform that’s a plus. On the other hand if they need to invest money to do so, what does that say about the belief in the platform and Zynga’s unquenchable need for more money for more marketing.
At the end of the day Zynga is a pawn in a game between giants and upstarts where everything is in play. A bolder move though would have been an acquisition of a competitor rather than a me-too deal. Dan Porter is CEO of games site www.omgpop.com and an investor in Songkick, SocialFlow, Producteev and Voxy. You can follow him @tfadp.