Google brews (another) Facebook rival, says report

Google is in talks with various online gaming companies as part of an effort to develop (another) Facebook competitor, according to a report citing people familiar with the matter.

The Wall Street Journal reports that Google is in discussions with Playdom Inc. (recently purchased by Disney), Electronic Arts's Playfish, and the Facebook-friendly Zynga Game Network about offering games on a new Google-built social networking service. This alleged Facebook challenger is rumored to be called Google Me.

When The Journal asked Google CEO Eric Schmidt this week if this new service would resemble Facebook, he said: "The world doesn't need a copy of the same thing." Schmidt also said that "you can expect a partnership with Zynga" — the outfit that offers such popular Facebook games as Farmville and Mafia Wars — though this has not been officially announced.

Zynga boasts 230 million active users. Farmville alone has more than 60 million, and it shares 30 per cent of its virtual goods revenue with Mark Zuckerberg and company. Rumors also indicate Google has invested heavily in Zynga.

Google already offers a social-networking service dubbed Orkut — which is quite popular in Brazil and India but few other places — and in February it launched Google Buzz, a Twitter-Facebook hybrid it bolted on to Gmail. The service sparked immediate complaints over its treatment of user privacy, and after several days Google made changes to the service in answer to the critics.

According to The Journal's sources, the rumored Google Me will incorporate Buzz and "go beyond it." Google offers its own payment system, Google Checkout, which it could use to collect virtual-goods dollars from games like Farmville, and you can also bet that the company sees social networking a necessary means of expanding its share of the online ad market. As recently as 2007, Google said that social-networking inventory wasn't monetizing as well as it would like, but a recent report indicates that Facebook has been more successful than expected, managing a net profit in 2009 on revenues of between $500 million and $700 million. ®