Google Buys Jambool: Social Networking Battle Begins

The search giant's latest acquisition shows Google isn't giving up on social networking, despite recent setbacks.

Google has purchased virtual currency platform Jambool, a move that will fuel Google's reported foray into the social networking world. Jambool's Chief Executive Vikas Gupta and Chief Technology Officer Reza Hussein confirmed the deal Friday on the company's website. "We are excited to announce that Jambool is becoming a part of the Google family today," the founders write. They add, "The game has only just begun."

Jambool started up in 2006 and a year later shifted its focus toward social networking sites by creating a virtual currency platform called Social Gold. "Along with success, we found fun and lucrative ways to monetize our apps -- specifically virtual currency and goods. That led us to create a platform to help developers create, host, manage and monetize their virtual economies," its founders write.

Facebook's Rival Service

Jambool's main competitor is Facebook Credits, Facebook's own virtual currency platform. Facebook Credits takes a 30 percent cut of earned revenue, whereas Jambool took 6 to 10 percent per transaction. It is mandatory for Facebook developers to use Facebook Credits for monetization.

Jambool CEO Vikas Gupta recently had some harsh words for Facebook Credits in an interview with Inside Social Games. Gupta listed many problems with Credits, including its hefty revenue cut, its implementation failures (only 1 to 2 percent of people spend money on social games, where as Gupta believes it should be closer to 50 or 60 percent), and its similarities to pre-paid credit cards, which have had "limited success." An example of Facebook's failures with Credits is the closure of its Credits-powered online Gift Shop.

Social gaming has begun a multibillion-dollar industry. FarmVille creator Zynga is worth more than $4 billion, and recent estimates] say that social gaming will reap more than $1 billion in revenue this year. Jambool conducted its own four-month study and discovered:

  • 7 percent of users that make a virtual goods purchase are still buying them after four months. Still, the vast majority of people never make a purchase in any game that they play
  • The best-performing social games can get 41 percent of users to make a repeat purchase
  • The average North American spent $74 on social games, while the average Asian player only spent $30 on virtual goods
  • Latin American users spend an average of $300 in a four-month period

Meanwhile, Google has kept quiet about the Jambool acquisition and is being especially elusive about the company's plans to build a social networking site. Google's CEO Eric Schmidt recently dodged the Wall Street Journal's question about Google Me, but did say that "the world doesn't need a copy of the same thing," which likely means Google Me won't be an exact replica of Facebook.

Buying Spree

Google has now acquired 18 companies in 2010, many of which are potential components of its rumored social networking site, Google Me. Before buying Jambool for a reported $70 million, Google snatched Slide for between $180 million and $230 million. Slide is a media company that develops games, widgets, and applications designed specifically to be used in social media, and are responsible for Facebook apps such as SuperPoke. Google also invested between $100 million and $200 million in Zynga, the company responsible for FarmVille and Mafia Wars, among others.

No matter what Google is or is not saying, it's readily apparent the company is preparing to battle Facebook on its own territory. Let's hope Google Me isn't another social networking failure for the company; Google recently shut down Google Wave, a collaborative Web site, and experienced embarrassing privacy flubs with Google Buzz.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuescompany newsInternet-based applications and servicesGoogleMergers / acquisitionsinternetsocial mediaFacebook

Struggling for Christmas presents this year? Check out our Christmas Gift Guide for some top tech suggestions and more.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Brennon Slattery

PC World (US online)

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?