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Bought the Farm: Handicapping Google's Big Investment in Zynga

by Seana Mulcahy on Sunday, July 18, 2010
Bought the Farm: Handicapping Google's Big Investment in Zynga

If you’re like me, you are steeped in your social networks. Maybe you log on to one or several multiple times daily. You update your status, upload a link, synch your feeds up together, email, etc.

It has also become part of my daily regime to know which of my friends and “friends” have fertilized their farm or “iced” someone. And that's all thanks to Zynga. I've been inundated with so many Zynga-related status updates and "job" requests that a while back, I updated my status to say: "I don't want to fertilize your crops or help you launder money." You'd be amazed at the sheer number of comments -- some ticked off, others very amused -- that I got in response to that.

But when my business hat is on, (it's rarely off) I have the utmost respect for Zynga. Don’t think you know the company? I bet you do. It's who makes FarmVille, Mafia Wars, FrontierVille and a bunch of other ridiculously popular games currently playable on Facebook.

I’ve been blown away (no pun intended) at how may people in my network avidly play, compete, and are downright addicted to such games. In fact, stats from AllFacebook show that 15 percent of the 200 million or so users who log in to Facebook every day, are playing FarmVille. Wowza.

So what does this mean for the Zyngas of the world? You guessed it: Piqued interest from bigger companies like Google. Less than two weeks ago TechCrunch reported that Google pumped $100-$200 million of funding into the company. This follows a $180 million cash injection from DST -- the Russian investment group that also owns a big stake in Facebook -- last December. TechCrunch says Zynga will be the “cornerstone of a service called Google Games" set to launch later this year. 

It's important to point out that the investment was reported to be made by Google itself and not Google Ventures, the company's dedicated VC unit. Why so much money invested? Why now? Well, this writer thinks it is a clever predatory move by Google.

First off, it would take traffic away from Facebook. Secondly, Zynga is known as PayPal’s biggest customer. Insert Google Checkout and voila, success. My wheels are spinning about what a winning combo it looks like. Perhaps Google could provide digital media folks like me a much-needed social graph. Paid placement search could be aligned with activities, avatars, micro-payments and multiple networks.

The Google investment also seems to provide Google with a healthy foundation of social gamers -- a group that has great potential value to marketers of all kinds. Don't think so? Just take a look at what the face of social gamers looks like today.

In a recent survey conducted by Information Solutions Group for PopCap Games (full report PDF here), the company looked at a percentage of Internet users in the U.S. and UK that played social games at least once weekly:

-In the U.S. 54 percent are female; 46 percent are male
-In the UK 58 percent are female; 42 percent are male
-In each country at least 20 percent are above the age of 30.
-In the U.S. 21 percent make between $50K - $74K.
-In the UK 20 percent make between £25000-£37999.

I can tell you that every time I look at my updated Facebook feeds, I scroll through pages of friends that have played some kind of social game. They’ve fertilized, fought or fed livestock, and each one I know plays multiple times daily. So who are they? One is a working mom, a single dad, a bachelor, a finance guy, a nurse, some ad execs and a retiree. Who do you know playing? Are you?

Social gaming environments make a digital brand marketer like me salivate at the opportunities for brands to place media buys. We all crave user engagement. If done strategically right, we can take advantage of truly engaged users that are immersed in an online environment that they enjoy, spend time with and visit often.

Tags: zynga, google, social games, seana mulcahy

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Comments (1)

July 18, 2010, 11:01 PM
Jordan: hello let me into farmville now you farmville hoggers chop chop my crop will wither and i spent $10000.000 dollars on my crop so chop chop and me into farmville

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