Google invests in Farmville-maker Zynga: Bad for Facebook?

By Andrew Couts July 19, 2011

Team Zynga

Google has invested in Facebook‘s leading social video game-maker Zynga, reports Tricia Duryee in All Things Digital. The revelation appeared in a 619-page document filed with the Securities and Exchange Commission Thursday by the maker of Farmville, which is preparing for its initial public offering (IPO). Zynga’s new SEC filing is triple the length of its original filing on July 1, and contains a trove of new information about the company, including a new list of investors.

Google’s name appears at the top of the list, though it is not known the significance of the placement of names on the list as the amount invested was not disclosed in the filing. Other notable investors include Peter Thiel, an early investor in Facebook; investment firms Kleiner Perkins Caufield & Byers and Union Square Ventures; and LinkedIn Chairman and co-founder Reid Hoffman, among others.

Word of Google’s investment in Zynga has been floating around for more than a year. The news was originally reported by Michael Arrington at TechCrunch, who said Google had thrown in around $100 million. (Later reports estimated that the number was closer to $200 million.) According to Arrington’s report, the deal was a “high strategic” move against Facebook. It’s possible that the Zynga investment is part of Google’s plan to build its own social gaming network that would run in conjunction with Google+.

While it might seem easy to view Google’s Zynga investment as a covert attempt to thwart its biggest rival, Facebook, the filing also shows how difficult it will be to slip through the gates of the enemy unharmed. Facebook, the filing shows, has enormous leverage over Zynga, more than was previously assumed.

According to AllThingD‘s Liz Gannes, Zynga must tell Facebook about all new games at least a week before they launch; any game that includes Facebook integration is exclusive to Facebook; and Facebook disproportionately favors Zynga over other game makers.

None of this may surprise anyone who watches these types of things closely. But that doesn’t mean it’s not worth watching at all. In fact, the war between Facebook and Google has only gotten hotter in recent months. And with both companies invested in Zynga, you can bet its quickly approaching IPO will be a major battleground.

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Gaming

Zynga brings Facebook’s Most popular game CityVille to Google+

Are you unhappy about all the recent Facebook changes, but can’t live without playing CityVille every day? Well game maker Zynga has the solution for you; you can now play CityVille on Google+. CityVille is the most popular game on Facebook, so it is pretty safe to assume that it will be very popular on Google+, and might even lure some Facebook users over to Google+.

Last week Google+ moved into public beta testing which means that people no longer required an invite to join the service. So CityVille joined Google+ at just the right time, as the site has become very popular in the last week. CityVille currently has 72 million users, and is the most popular game on Facebook and has been since it first launched. Zynga has three of the five most popular games, and we imagine it won’t be long until they are all on Google+.

Gaming

Report: Zynga may delay IPO

Many investors' eyes have been fixed on social gaming company Zynga since the company filed for an initial public stock offering at the beginning of July, with expectations the move could bring as much as a billion dollars into the company. However, recent instability in the U.S. and global market has thrown a chill over many aspects of the investment community, and now the New York Post reports that Zynga is looking at pushing back its IPO a bit. Initially expected to land in September, the paper cites two sources "with knowledge of Zynga's plans" that the company may delay its IPO until November.

The report also says the SEC is pushing Zynga for more information about its accounting practices as well as the number of paying customers it has for each of its gaming titles. In a filing with the SEC, Zynga has indicated that fewer than five percent of people who play its social games actually pay for virtual goods in the games.

Gaming

Google+ ‘Games stream’ confirmed

Google +

As expected, Google+ will soon have an integrated games section, putting the new social network in even more direct competition with Facebook, the current leader in online gaming platforms.
Confirmation of the new games section, which will be called the Games stream, comes via Google's help pages for Google+, as uncovered by Chris Davies at Slashgear. Under the "Content that appears in the stream" help page, a portion of the explanation explicitly mentions the new games feature.
"If you're looking for updates shared from games, check out your Games stream," the copy reads. The link to the Game stream currently brings up a 404 (page not found) error.

This is not the first evidence that Google+ would have a games section. The first instance, however, was far less clear, with a mention of "games" buried deep within the site's code. And a few weeks ago, Google posted a job listing for someone to head a division called Games. In other words, there is really no surprise that Google+ will have games. It's just a matter of when Games will launch.
Games on Google+ is important from a business standpoint primarily because it has the ability to really hurt Facebook where it counts: its wallet. In-site gaming has become a huge business for Facebook, who essentially controls Zynga, maker of the most popular Facebook games. It was recently revealed that Google has also made an investment in Zynga, which is preparing to launch its IPO.
Google+ Games could also do a number on Apple's Game Center, which is also one of the largest social gaming platforms.
If you ask us, Google is doing the right thing by adding a whole new stream just for games and game notifications. One of the most annoying parts of Facebook is the endless stream of invites and other alerts about games you don't care to play, from friends you barely know.
As a whole, Google+ is having a stellar start. Less than a month after launch, the social network is already closing in on 20 million users. After only 16 days, Google+ had already reached 10 million users. It took Twitter 780 days to get to that number; Facebook, 852 days. (Though Google has the advantage of already being an Internet behemoth, so take that info with a grain of salt.)