AAA Google reportedly takes stake in Zynga

Google reportedly takes stake in Zynga

US-based search group Google has reportedly made a $100m to $200m investment in social gaming company Zynga.

The investment, revealed by news provider TechCrunch but unconfirmed by Google, would reportedly "cornerstone" the company’s launch of its Google Games platform later this year.

Zynga raised nearly $400m from venture investors, including $147.4m from Japan-based media conglomerate Softbank Corporation last month.

Zynga, with games Farmville, Texas Hold  ‘em Poker and Mafia Wars, is one of the big three social games companies that provide applications for platforms, such as Facebook. A further, five-year deal between Zynga and Facebook was struck earlier this year and industry experts said it might be a factor behind Google’s reported interest.

News provider ReveNews in a comment by Andrew Wee said search engines were less important than 10 years earlier as social networks provided recommendations and links to drive traffic to websites.

Google makes nearly $24bn per year from advertising via its search engine and the investment in Zynga could act as a "tunnel" into Facebook, according to John Taysom, former manager of the Reuters Greenhouse corporate venturing fund and angel investor.

Taysom said: "The Facebook versus ‘rest of web’ battle is starting in earnest. Even Google has to ‘dream its worst nightmares and then invest in them’ and Zynga could be a tunnel inside [Facebook] to use to serve ads within the games. Facebook cannot remove Zynga as its games are too popular."

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