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Zynga Investment May Herald Google Games
A post at TechCrunch claims knowledge of large investments from Google into social game company Zynga, makers of FarmVille and Mafia Wars. The amount of money involved is not small — somewhere in the $100-200 million range — and could facilitate Google's expansion into the games market. Quoting:
"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."
Personally, I'm always looking for ways to make Paypal less relevant.
The funny thing is, PayPal is mostly just relevant in the US and other western countries. Other countries have better online systems with full encyption, added security and several ways to use their system, and people happily use these to pay their phone and tv bills and everything else. You can also top up your account by buying one of the several coupons from the kiosk near you.
It's actually quite funny how US people put up with PayPal and their shitty and insecure system.
This is more likely to herald the entrance of Google into crap, very buggy flash games with unsubtle ways to get children to bug their parents to pay for very expensive pixels to put in their crap flash game.
Evil people are out to get you.
I feel sort of out of touch I have no idea who zynga is, did they do something important at any point in time?
Yahoo!'s (and most of the other search engines) problems was, that they tried to promote most of the auxiliary services through the main site. Though Yahoo! isn't exactly loosing, they just did not get the majority of the search market, but for instance in Japan they are highly popular.. they are also the forth most visited site on the Internet, I wouldn't call that exactly loosing.
Google is doing a lot of stuff too, but most of it is standing alone (i.e. youtube) and is self-promoting.
They could clean up the start page a bit (or at least make it more customizable), but generally they are doing search + ads as primary business and the other stuff is loosely connected.
As for checkout.. well, PayPal was the first major popular global Internet payment option, but they are causing a lot of grief lately and will loose importance.
What will succeed them? My best bet is Amazon Payments, as they have attractive payment conditions (the nearest I have seen so far to micro-payments) and they have an established customer base with access to bank account data and _some_ trust of the users.
Google has no business where people regularly spend money from their account. They will have a hard time to make people set up payment account on their site, but it's not impossible.
This probably sheds some new light into Google's sudden defense of Flash blog post from June 29
http://apiblog.youtube.com/2010/06/flash-and-html5-tag.html
Investing in a bunch of Flash games means they have to now start propping up the Flash platform instead of only touting the virtues of HTML5.
http://en.wikipedia.org/wiki/Category:On-line_payment
eg: Moneybookers