Search giant Google has finally announced the acquisition of social networking services firm Slide, in a move analysts say is a clear indication the search giant will attempt to dethrone Facebook with the construction of a new social networking service.
The acquisition comes after a number of deals by Google in the social gaming arena, which industry experts believe will be a key part of the company’s new service.
“They need to get groovier thinkers in there to succeed,” Stewart Media chief executive Jim Stewart says. “Google needs to really think about its staff before it embarks on something outside of search.”
Engineering director David Glazer said in an official blog post the motivation behind this acquisition is to focus on key social networking services, like different ways users can share information.
“We’re working to develop open, transparent and interesting (and fun!) ways to allow our users to take full advantage of how technology can bring them closer to friends and family and provide useful information just for them,” engineering director David Glazer said in an official blog post.
Slide, which was founded by PayPal co-founder Max Levchin back in 2005, is primarily a widget maker. Originally designed to allow users to share photos on MySpace, it now offers widgets like SuperPoke on Facebook, and a service that allows users to share photos on blogs.
The acquisition is a no-brainer for Google if it wants to build a solid social network – Business Insider reports Slide makes over 75% of its revenue from Facebook widgets.
“Slide has already created compelling social experiences for tens of millions of people across many platforms, and we’ve already built strong social elements into products like Gmail, Docs, Blogger, Picasa and YouTube. As the Slide team joins Google, we’ll be investing even more to make Google services socially aware and expand these capabilities for our users across the web.”
While Google did not reveal a purchase price, TechCrunch puts the acquisition at $US182 million. It also reports Levchin made $US25 million from his preferred shares, plus $US14 million in common stock. A number of venture capital firms, including BlueRun Ventures and The Founders Fund, also made millions.
Entrepreneur Kevin Rose, founder of news aggregator website Digg, sparked the social network rumour earlier this year when he said on his site: “Google to launch Facebook competitor very soon”. Former Facebook senior manager Adam D’Angelo wrote on his Q&A site the claim was “not a rumour. This is a real project”.
Slide has had its problems. It has changed its offering several times, moving from widget to widget, but TechCrunch reports the attraction here is a knowledgeable staff with deep experience on social networking.
“[Slide] does have a deep, battle-scarred team that knows social. And Google is desperate to get social right,” it reports.
Google has attempted to enter the social networking scene before, primarily with its Google Buzz and Wave platforms. Its theory was that due to the millions of users already using Gmail every day, the company should have an easy time transferring them to these new social networking services.
However, few users caught on. Facebook already dominates the social networking scene, and Google Buzz offered fewer features and a less attractive interface. Users were also disappointed by a number of security scares.
Stewart Media chief executive Jim Stewart says Google needs to really look at its staff before it embarks on another venture unrelated to its core search offering.
“They do search really well, but the other stuff outside of that, not so much. Like at Google Video, it’s okay, but YouTube just does away with it. It’s just that user friendliness or usability that they seem to lack.”
“When you stand back and watch these services like Buzz, Wave, Wikisearch and so on, they just don’t have that safer, ease of use approach. I know they have thousands of thinkers, but not enough design types. And this acquisition is probably just what they need to do.”
Large companies like Google and Apple often acquire companies purely for their talent, and do away with the core service.
The move comes after a number of Google ventures into social gaming. The Wall Street Journal reported Google chief Eric Schmidt said that “you can expect a partnership with Zynga”.
Even earlier, on the July 12, TechCrunch reported Google invested up to $US200 million in Zynga. The company is most famous for its Facebook FarmVille app, which has a user base of millions and as analysts point out, is plenty of fodder for ads.
They’re successful too, with Microsoft Bing recently gaining 400,000 fans on its Facebook page due to a single Farmville ad.
Social gaming is now becoming an intrinsic part of the social network scene, with 40% of time on Facebook now dedicated to these types of games.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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