TechCrunch claims Google has invested somewhere between $100 million and $200 million in Zynga, the developer of popular Flash games such as FarmVille and Mafia Wars. The site claims the investment will play a key role in Google Games, a social game service expected to be introduced later this year.
The investment was made by Google itself, not Google Ventures, say our sources, and it’s a highly strategic deal. Zynga will be the cornerstone of a new Google Games to launch later this year, say multiple sources. Not only will Zynga’s games give Google Games a solid base of social games to build on, but it will also give Google the beginning of a true social graph as users log into Google to play the games. And I wouldn’t be surprised to see PayPal being replaced with Google Checkout as the primary payment option. Zynga is supposedly PayPal’s biggest single customer, and Google is always looking for ways to make Google Checkout relevant.
And there’s more. These same sources are saying that Zynga’s revenues for the first half of 2010 will be a stunning $350 million, half of which is operating profit. Zynga is projecting at least $1.0 billion in revenue in 2011, say our sources. This blows previous estimates out of the water.