Why Google Purchased Slide: To Beef Up Its Social Gaming Push

Google (GOOG) plopped down $228 million yesterday to purchase Slide, a start up that makes games and applications for social networks. It's the clearest signal yet that Google sees gaming as the crucial foundation on top of which it might begin to build a network that would compete with Facebook.

Slide, created by PayPal co-founder Max Levchin, had stumbled through several business models in recent years. Its final pivot was a move away from advertising to the sale of virtual goods, precisely the transition Google will be making if it moves into social games.

This deal was smaller than some of the other social gaming acquisitions made by major players. Electronic Arts (ERTS) bought Playfish for $400 million back in November of 2009. And Disney (DIS) just shelled out $760 million for Playdom just last week.

Last week Google was rumored to have invested somewhere between $100-200 million in Zynga, the kingpin of social gaming. CEO Eric Schmidt was coy, telling the WSJ that "you can expect a partnership with Zynga" in the future.

That deal, along with yesterday's purchase makes it seem as though Google is more interested in becoming a platform for social games, as opposed to creating its own branded products. Schmidt was quoted in the New York Times saying, "It's hard to see how we could end up as becoming a significant gaming or entertainment source. It's much more likely that we would become an infrastructure for those sorts of things."

Slide has been working in several areas that could help Google down that road. It has the straightforward experience of creating social gaming apps for both mobile and web. But as Levchin told Michael Arrington of Techcrunch, Slide has also been working on a platform structure in which users could create their own virtual goods for sale. It's easy to see how technology along those lines would be useful to Google if they look to position themselves as the infrastructure for multiple developers.

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