The Rumored Google-Zynga Deal Is Really All About Facebook

(MoneyWatch)  Social gaming giant Zynga continues to expand its empire. Both Techcrunch and Venturebeat are reporting that Google (GOOG) has invested more than $100 million in Zynga and will incorporate its products into a new social networking effort. It's a winning deal, as both companies look to better position themselves against Facebook.

Gigaom offered some corroborating evidence of a Google-Zynga deal from the Twitter account of Allan Leinwand, now a chief engineer at Zynga. Leinwand posted this Tweet on Sunday, indicating that the two companies have been working together on a business development deal. The Tweet has since been deleted.

For Zynga, the partnership allows it to reduce its reliance on Facebook as its main revenue source. The two had been squabbling over the use of Facebook Credits, a pay system that would take a significant cut out of Zynga's revenue. Google would give the company another large platform to interact with users.

Added value seems to be the strategy for Google these days. The Zynga deals follow closely on its acquisition of travel giant ITA. Hitwise Intelligence did an analysis of where user go after they visit Google sites and found that gaming was an obvious opportunity. "What does clickstream data tell us about Google's next potential foray? Games. After travel, the next biggest downstream industry from Google.com is games and Google does not yet have a presence in that industry."

For Google, Zynga's games are an important piece of the social networking puzzle. The company will never be able to premier a product now that, standing alone, can hope to challenge Facebook. Instead Google seems to be working in reverse, establishing the individual pieces one at a time and tying them together later on. It's already got photos, micro-blogging and location based services. The key will be pushing an integrated suite of these tools on platforms like Android and Google TV. If Zynga becomes built into these offerings on a base level, and prompts users to login with their Gmail accounts, it could go a long way towards helping the search giant construct its own version of the social graph.

Related Links

• Why Facebook and Zynga Buried the Hatchet
• ITA is Worth Anti-Trust Risk To Google
• How Facebook's Social Web Will Challenge Google Search