Google Secretly Invested $100+ Million In Zynga, Preparing To Launch Google Games

[Jagi]

Google Secretly Invested $100+ Million In Zynga, Preparing To Launch Google Games

Google has quietly (secretly, one might say) invested somewhere between $100 million and $200 million in social gaming behemoth Zynga, we’ve confirmed from multiple sources. The company has raised somewhere around half a billion dollars in venture capital in the last year alone, including $150 million from Softbank Capital last month and $180 million late last year from Digital Sky Technologies, Tiger Global, Institutional Venture Partners and Andreessen Horowitz. The Softbank announcement was never officially confirmed by the company, however, and the Google investment was likely part of that deal as well.

The investment part of the deal closed a month ago or so. A larger strategic partnership is still in process.

The investment was made by Google itself, not Google Ventures, say our sources, and it’s a highly strategic deal. 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. And I wouldn’t be surprised to see PayPal being replaced with Google Checkout as the primary payment option. Zynga is supposedly PayPal’s biggest single customer, and Google is always looking for ways to make Google Checkout relevant.

And there’s more. These same sources are saying that Zynga’s revenues for the first half of 2010 will be a stunning $350 million, half of which is operating profit. Zynga is projecting at least $1.0 billion in revenue in 2011, say our sources. This blows previous estimates out of the water.

Zynga continues to work on high level strategic business development deals. The reason these deals are so attractive to companies like Yahoo and now Google is this – Zynga allows them to rebuild the massive social graph, currently controlled by Facebook. For whatever reason people love to play these games and get passionately addicted to them, coming back day after day. That’s helped Facebook become what it is today. Google, Yahoo and others want some of that magic to rub off on them, too.

We’ve reached out to both Google and Zynga for comment. No word back yet from either of them yet.

There will be lots more news on Google Games in the near future, we’re guessing. Here’s a job opening for a Product Lead for Google Games, for example:

Product Management Leader, Games – Mountain View

This position is based in Mountain View, CA.

The area: Product Management

One of the many reasons Google consistently brings innovative, world-changing products to market is because of the collaborative work we do in Product Management. With eyes focused squarely on the future, our team works closely with creative and prolific engineers to help design and develop technologies that improve access to the world’s information. We’re responsible for guiding products throughout the execution cycle, focusing specifically on analyzing, positioning, packaging, promoting and tailoring our solutions to all the markets where Google does business.

The role: Product Management Leader, Games

The Product Management Leader, Games will be a flexible, results-oriented, and experienced senior leader who will be responsible for developing Google’s games commerce product strategy and partnering to build and manage the business with a cross-functional team. You will have visionary product insight, combined with experience in the online content business, significant technical expertise and extensive leadership and business skills. The Product Management Leader, Games combines a great instinct for developing compelling products with a strong focus on users and technical aptitude to work with a world class engineering team and the business sense to drive product goals and strategies.

Responsibilities:
Identify market opportunities and define product vision and strategy.
Develop and launch new products and enhance existing products.
Lead and mentor a team of Product Managers.
Engage closely with the engineering team to help determine the best technical implementation methods as well as a reasonable execution schedule.
Establish partnerships as necessary to drive the growth of Google’s products.

Requirements:
Technical degree or equivalent experience. Masters or PhD preferred.
Experience building an online gaming business both on the web and on mobile devices. Deep understanding of the game business and how to create hits.
Proven success in driving product strategy and product design for a successful game.
Solid product management experience with a track record of creating innovative and winning Internet or software solutions.
Significant people and organizational management skills. A natural leader and mentor.
Demonstrated ability to gather user requirements and convert them into a winning product vision. Strong quantitative and analytical abilities.
Strong communication skills with the ability to evangelize the merits of Google’s products internally and externally.

Zynga

Zynga was founded in July 2007 by Mark Pincus, Michael Luxton, Eric Schiermeyer, Justin Waldron, Andrew Trader, and Steve Schoettler

Zynga is a network of gaming applications built off of classic games like Poker, Battleship, and Attack!. The games are found on social networks like Facebook and Bebo.

In addition to making their own games, the company has created a network which allows third party developers to become part of the Zynga network. Zynga claims to be the largest social game network on the web with self published numbers of 1.3 million daily active users and 20 million registered users (as of 7/08).

Google

Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps and YouTube. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing them with a rich source of information.

Google has also made strong moves into the web-based apps space with acquisitions of Jotspot (documents), 2Web Technologies (spreadsheets) and Zenter (presentations). The company has also made a splash with the acquisitions of YouTube, DoubleClick and Feedburner.

In 1996, Stanford graduate students Sergey Brin and Larry Page famously started the search company in a Stanford dorm room. The two eventually moved the company to a Menlo Park garage, which the company quickly outgrew. Sun Microsystems founder Andy Bechtolsheim was the company’s first investor with other notable investors including Ron Conway, John Doerr, Mike Moritz and Ram Shriram.

Eric Schmidt is the CEO and Chairman.

 

[Devilstrider]

Damn

 

[TheyCallMeBe]

Man Google stock is gonna be like Berkshire Hathaway's if they keep this shit up...

 

[Mrbonner]

 

[malaki]

this isn't some huge gangster move. facebook still owns social gaming. this is just google throwing money around because they can't compete with fb.

 

[ugk]

In 10 years, Google will be printing their own damn money

 

[dat_cartel_boi]

Damn Google!!!!!!!!!!

 

[thismybgolname]

this isn't some huge gangster move. facebook still owns social gaming. this is just google throwing money around because they can't compete with fb.

Can't compete?

Google is gearing up to go to war in the next 5-10 years.

If they're going after social networking/gaming and they're already starting to flood the market with Google phones, do you really think facebook will still be around?

Really?

There is a reason that Microsoft went after the social networking crowd, they just did it wrong and didn't have their own social network that had a strong enough brand to push units.

Thanks to HTC & Samsung, Verizon & Sprint Google doesn't have to push shit
but software out for their phones.

Once Google Me (whatever they call it) drops on these mini computers in our pockets Facebook will be forgotten.

Plus kids are always up on new shit and I doubt my daughter will know what Facebook is.

 

[Spectrum]

Once Google Me (whatever they call it) drops on these mini computers in our pockets Facebook will be forgotten.
.

Im not convinced. Google has done nothing but FAIL in the social market...and their lone real big success was by acquisition... theyve managed to even fuck up good startups that they purchased in the social space.. they are so bad at social that social startups (who want to continue to operate in the space after acquisition) wont even sell their startups to Google as they know it will put their operation in the graveyard.

 

[phillyphilly]

If Google ever launches an educational adventure, I am on it like white on rice. These guys are giants.

 

[thismybgolname]

Im not convinced. Google has done nothing but FAIL in the social market...and their lone real big success was by acquisition... theyve managed to even fuck up good startups that they purchased in the social space.. they are so bad at social that social startups (who want to continue to operate in the space after acquisition) wont even sell their startups to Google as they know it will put their operation in the graveyard.

Here is how I see it (not now but within the next 5 years).

You buy an Android phone with interacts with the rest of your Google products (phone, car, television, business & personal life, not to mention helps to manage your online purchases, while storing life on its cloud).

Google is the only company that I can think of that has entered so many markets but no one questions them.


They won't have a social networking site/tool in the sense what we're used to seeing but a Google Life, where all of our information is stored.

 

[Spectrum]

Here is how I see it.

You buy an Android phone with interacts with the rest of your Google products (phone, car, television, business & personal life, not to mention helps to manage your online purchases, while storing life on its cloud).

Google is the only company that I can think of that has entered so many markets but no one questions them.


They won't have a social networking site/tool in the sense what we're used to seeing but a Google Life, where all of our information is stored.

But that is not really in the social space. Yeah, Google will do that easily...but in terms of applications that manage social interactions, I have zero confidence in Google. Google knows how to manage large data sets algorithmically, but once you get beyond that, they are like because they always look at it purely from a technical standpoint like with Google Wave.... great for engineers but not for the mass market.

 

[thismybgolname]

But that is not really in the social space.

Good thing they've got the money to buy out someone who is

Yeah, Google will do that easily...but in terms of applications that manage social interactions, I have zero confidence in Google. Google knows how to manage large data sets algorithmically, but once you get beyond that, they are like because they always look at it purely from a technical standpoint like with Google Wave.... great for engineers but not for the mass market.

I would put Android in that boat as well.

The UI for the OS is laughable but hopefully Matias Duarte work on that.

If they can get that to work then the skys the limit.

If they can't then they will just buy someone else.

 

[Spectrum]

Good thing they've got the money to buy out someone who is
.

Google and Yahoo both balked at purchasing Facebook when they could have been had for a bit over a billion... I bet they are both sick about...but shit..Yahoo also balked at buying Google when they were a startup.

Facebook is now too larger for either of them to really purchase now but I suspect that Google will continue to do little deals like this one with Zynga and other players..

 

[ansatsusha_gouki]

If Google ever launches an educational adventure, I am on it like white on rice. These guys are giants.

 

[Complex]

this isn't some huge gangster move. facebook still owns social gaming. this is just google throwing money around because they can't compete with fb.

This isn't just to compete to facebook

This is for people to spend more time on googles site, thus more ad revenue

If anything it fucks over Yahoo/Bing

 

[Spectrum]

This isn't just to compete to facebook

This is for people to spend more time on googles site, thus more ad revenue

If anything it fucks over Yahoo/Bing

 

[Cock Head Jones]

But that is not really in the social space. Yeah, Google will do that easily...but in terms of applications that manage social interactions, I have zero confidence in Google. Google knows how to manage large data sets algorithmically, but once you get beyond that, they are like because they always look at it purely from a technical standpoint like with Google Wave.... great for engineers but not for the mass market.

that is where apple >>>> google.

apple understands the emotional part...behind the technology.

why was this investment a "secret" though?

 

[Louis Koo]

has google monetized youtube yet?

 

[Spectrum]

that is where apple >>>> google.

apple understands the emotional part...behind the technology.

why was this investment a "secret" though?

Yep..cosign the above...and yeah...not sure why it was done that way..

 

[Jagi]

This isn't just to compete to facebook

This is for people to spend more time on googles site, thus more ad revenue

If anything it fucks over Yahoo/Bing

is bing the reason i get all these ad pop ups while trying to read an article online?


bing can eat a dick

 

[Jagi]

that is where apple >>>> google.

apple understands the emotional part...behind the technology.

why was this investment a "secret" though?

a few people i know dont like the google interface.. they held an android and didnt like it.. found the apple interfaces to be simpler and directed at them, the consumer who doesnt give a shit about my tech talk..

one thing also people like is the bottom dollar.. tv shows and movies $1.99 and up and shooting for 99 cents.. the competition wants to figure how to charge more.. the competition may have a better product, reliability and support, it cant cant compete with simplicity and lower prices.





the problem with competing with facebook... is that there is another animal in the jungle.. myspace.. no kids or teens etc are fucking with facebook.. its all adults and some of them just like posting on peoples wall.. its a step up from linkedin...


microsoft's kin (and consoles) could probably have seen more from myspace than facebook.. facebook is a giant chat room for adults.. myspace is where the youth are and where most companies advertise.. its also customizable kids love that.. designing their own pages, setting moods and converstations.... when you hear about all the teens in trouble on the news.. you hear the news comment about their myspace page.. never facebook

what do you get with facebook? except divorced



as for the zynga investment being a secret, i think they were just saving their announcements and advertisements for a mass push of chrome os, google me, some android features and lord knows what else.

 

[malaki]

kids like shiny new toys. google is not capable of creating that type of product inhouse, they are run by suits now. all the serious people retired, are doing new companies, or don't give a shit.

 

[MadWun]

The question to me is: Apart from having a shitload of players, how does Zynga make money?

Advertising? Was this really a good investment by Google?

 

[Spectrum]

The question to me is: Apart from having a shitload of players, how does Zynga make money?

Advertising? Was this really a good investment by Google?

Zynga is one of the most profitable web companies EVER homie... they may EARN (not revenues) 300 million dollars this year alone...revenues are closing in on a billion already

Advertising and really virtual currency and virtual products is where they earn money and the margins on virtual goods are bananas

 

[malaki]

zynga is shady as hell. they are proof there's a sucker born every minute.

 

[thismybgolname]

Google and Yahoo both balked at purchasing Facebook when they could have been had for a bit over a billion... I bet they are both sick about...but shit..Yahoo also balked at buying Google when they were a startup.

Facebook is now too larger for either of them to really purchase now but I suspect that Google will continue to do little deals like this one with Zynga and other players..

I didn't know that Yahoo had that chance or Google for FB.

Funny how shit happens in the tech world, I see why these guy act salty towards each other.

I see social network sites changing to something that we haven't seen before.

If Google (big if) can really manage to manage our lives, while connecting us to the outside world, then how is that not a social networking in itself (everything else is essentially just a web based app)?

If everything that you use has Googles stamp on it, then no matter how many pageviews that Facebook gets Google is still in charge.

You're surfing your FB page while on a Google phone.

FB is much more user friendly but it is only a small piece of what I assume Google is trying to do (M$ too with the Ken but they don't seem to know how to execute).

You know way more about the stuff than I do because you're in the industry so I can't really argue with you.

I'm just stating what I think will happen (same with optical media eventually disappearing).

Google is trying to get everything connected by giving away technically better products than their competitors.

They will be the #1 controller of information for my lifetime but that motto "not evil" kind of scares me a little

These are certainly fun times to be a nerd.

 

[thismybgolname]

What the hell did they manage to do in three years that allowed them to generate so much money?

 

[Spectrum]

I didn't know that Yahoo had that chance or Google for FB.

.

Man.. Yahoo had a chance to buy Google TWICE.. one time for 200 million and another time for 1 Billion... ol dumb ass ceo Terry Semel turned it down...and not only that...he then gave Google the Yahoo search deal that made Google the default #1 in the market and sealed their fate. That is what happens when a Media guy is running a tech company... dude also passed on Facebook... Zuckerberg in 2007 had still almost 70 percent of the company.... he just wanted enough for him to be a billionaire after the purchase. Semel against balked.

Yahoo had a chance to own both Google and Facebook for 2 Billion

Neither would have probably become the behemeths that they have become now had they been swallowed by Yahoo...but talk about missed opportunities..

 

[Spectrum]

What the hell did they manage to do in three years that allowed them to generate so much money?

man..those dumb ass games have a total of like 300 million users. People play the shit out of farmville, frontierville etc.... then they buy shit for their farms, etc... the amount of money that are generating is fucking staggering man.... people actually purchase animals, fertilizer, etc for their fucking farms

 

[thismybgolname]

Man.. Yahoo had a chance to buy Google TWICE.. one time for 200 million and another time for 1 Billion... ol dumb ass ceo Terry Semel turned it down...and not only that...he then gave Google the Yahoo search deal that made Google the default #1 in the market and sealed their fate.

How much of a severance package did they give this guy for destroying their company

That is what happens when a Media guy is running a tech company... dude also passed on Facebook... Zuckerberg in 2007 had still almost 70 percent of the company.... he just wanted enough for him to be a billionaire after the purchase. Semel against balked.

Yahoo had a chance to own both Google and Facebook for 2 Billion

Neither would have probably become the behemeths that they have become now had they been swallowed by Yahoo...but talk about missed opportunities..

Crazy how things turn out.

man..those dumb ass games have a total of like 300 million users. People play the shit out of farmville, frontierville etc.... then they buy shit for their farms, etc... the amount of money that are generating is fucking staggering man.... people actually purchase animals, fertilizer, etc for their fucking farms

That is them

I have coworkers that spend ALL DAY playing farmville like it is crack.

It only took them 3 years though.

 

[Complex]

a few people i know dont like the google interface.. they held an android and didnt like it.. found the apple interfaces to be simpler and directed at them, the consumer who doesnt give a shit about my tech talk..

That's because a great portion of our society are stupid, and also some people dislike change.

If you're used to something one way, you think it should be that way. If those same people were given the option of widgets and doing their screens themselves with icons they would all of a sudden love it.

Neither would have probably become the behemeths that they have become now had they been swallowed by Yahoo...but talk about missed opportunities..

Think about how things would be differently.

Yeah, Yahoo would have definitely stunted Googles growth

Google is trying to get everything connected by giving away technically better products than their competitors.

They will be the #1 controller of information for my lifetime but that motto "not evil" kind of scares me a little

These are certainly fun times to be a nerd.

I find myself using Bing more

People have a limited vision of what Google is trying to do. They're taking it above Facebook.

They're trying to get a piece of revenue off everyone using the net, whether it be browser, OS, search engine, social networks, cell, cell browser, map directions, games...

It's a little disturbing

 

[Jagi]

man..those dumb ass games have a total of like 300 million users. People play the shit out of farmville, frontierville etc.... then they buy shit for their farms, etc... the amount of money that are generating is fucking staggering man.... people actually purchase animals, fertilizer, etc for their fucking farms

there was a game where someone bought virtual land, for a couple grand possibly in the hundreds.. it had mines for mining, land for raising live stock etc...

dude cultivated that virtual land and sold it for a million dollars i think it was in europe somewhere

 

[Jagi]

MMORPG Operator Claims World Record For Most Expensive Virtual Object ($330k)

First Planet Company, a subsidiary of the MindArk Group that develops and markets the Massively Multiplayer Online Role Playing Game Planet Calypso, which is based on the Entropia Platform and part of the Entropia Universe (still with me?), claims that the world record for most expensive virtual object ever to be sold has been smashed into thousands of virtual pieces.

First Planet Company about a month ago announced the public auction of the Crystal Palace Space Station, according to the release ‘an extremely popular hunting destination that is in orbit around Planet Calypso’. The lucky winner of the auction, Erik Novak (aka “Buzz Erik Lightyear”), ended up winning the bid with a $330,000.00 USD offer.

It’s 2010, so it’s no longer surprising for most people to see this kind of money being spent on virtual objects, and I doubt this world record will stick around for long.

Novak puts it this way:

“This is a stunning investment opportunity, and I have complete faith I will recover what I spent relatively quickly. To say Planet Calypso has changed my life would be an understatement. I have even found the love of my life in the game, and now we live together in real life. I feel very confident about purchasing the Crystal Palace Space Station as I have already invested years of time, dedication, work, hope and love. All of those things have already paid off more than I could have ever imagined. With the new game engine, new features and almost ten years of experience Planet Calypso is one of the few safe investments in this economy.”

For the record (wink, wink, nudge, nudge), the previous world record as registered by the authorative Guinness World Records book in 2008, was also a sale of a virtual property in Planet Calypso. The amount paid for that property was much smaller though, with a reported $100.000 USD being spent on a Virtual Space Resort and Nightclub now dubbed Club Neverdie.

Do you spend money on virtual goods? What if it would concern a significant investment that you’re confident would generate a great return down the line?

 

[brohammus]

Dayum.