14 DAY TRIAL // The rumors around Google’s plans to get into social networking are starting to look even more interesting with reports of the company investing in Zynga, the social gaming powerhouse. And it’s a serious investment too, between $100 million to $200 million, TechCrunch says citing several sources. Others have independently confirmed the deal, also from unnamed sources, so the rumor is solid. The investment is said to be part of a plan for Google to get into gaming, specifically the social games that Zynga specializes in.
Google is said to have invested a significant sum in Zynga in a deal closed at least a month ago. But the two companies have bigger plans together and Google is apparently working on launching its own gaming platform, to be called Google Games. The platform will launch later this year, according to the rumors.
The move would actually make a lot of sense for the company. There’s no denying that social gaming is incredibly popular, thanks in no small part to Zynga. And Google is said to be working on its own social network, Google Me, which would greatly benefit from having some of Zynga’s biggest hits, or even exclusive games, to lure in people.
What’s more, Chrome OS is coming later this year and games have already been show to be an important component for the upcoming operating system. And social games would be the best fit for an OS which emphasizes the web exclusively.
Zynga is riding very high recently. It would be another major partnership after the deal with Yahoo. It has also entered a long-term partnership with Facebook after relations got tense for a while.
Interest in the company has been growing tremendously. Investments from DST last autumn that seemed wildly optimistic at the time, now look like a very smart move. Zynga is said to have raised about half a billion dollars in funding so far and is now valued at several billion dollars.
The gaming outfit has made about $350 million in revenue in the first half of the year, half of which is operating profit, and is on track to bring in $1 billion in 2011, according to the rumors. For perspective, Facebook is expected to make a little over $1 billion in revenue this year and it’s profit margins are much lower.