Wall Street Journal - Google Develops a Facebook Rival

Google Inc. is in talks with several makers of popular online games as it seeks to develop a broader social-networking service that could compete with Facebook Inc., according to people familiar with the matter.

Google has been in discussions with top developers to offer their games on a new service it is building, these people said. Those developers include Playdom Inc., Electronic Arts Inc.'s Playfish and Zynga Game Network Inc.—a company in which Google recently took a financial stake, these people said.
It is unclear when Google may launch the new gaming offering and the plans aren't finalized, but people briefed on the matter said the games would be part of broader social-networking initiative that is under development by the Mountain View, Calif., company.

In an interview this week, Google Chief Executive Eric Schmidt declined to confirm the development of a social-networking service that would incorporate social games, rumored to be called "Google Me." When asked if Google's service might resemble Facebook's, Mr. Schmidt said "the world doesn't need a copy of the same thing."

Google's push into social games represents the latest attempt by the Web-search leader to capture users and advertising dollars that are increasingly flowing to social networking, an area dominated by Facebook, Twitter Inc. and others.
For social-game developers, a successful Google offering would mean they wouldn't be so heavily dependent on Facebook, where the vast majority of users access the games. Consumers' appetite for social games is booming— Zynga's "Farmville" game has more than 60 million active monthly users—and that is attracting bigger players looking to tap new sources of growth. On Tuesday, Walt Disney Co. acquired Playdom for $563.2 million plus up to $200 million more if performance targets are reached. And retailer GameStop Corp. agreed to buy online game distributor Kongregate Inc. for an undisclosed amount.

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