Updated: Why Google Would Want to Buy Valve

Updated at the end: Google’s rumored acquisition of game delivery network Valve — and it is, at this point, just a rumor — would give the search giant a robust platform for delivering, updating and charging for digital content. If true, it’s a smart move for Google, and one that should make content delivery firms nervous. It’s also a volley in the war between centralized and distributed computing.

Paying for games with advertising is a growing business. Sites like Kongregate share ad revenue with casual game developers, and ad networks like NeoEdge have seen strong growth from their focus on casual gaming. Valve has delivered some of the most popular games in recent history (for an overview of the Valve network’s distribution and size, check out the piece we wrote back in April.) Acquiring Valve, which has recently added social network features to its distribution client, would help Google get a stronger foothold in this space.

But Valve isn’t a gaming play for Google. This is about software distribution and updates through its Steam platform.

Valve publishes multigigabyte content in dozens of countries, and it wraps that content in digital rights, ranking and payment systems. The games work offline, checking in occasionally to validate licenses and look for updates. It also patches those games. Of course, now that Google is in the desktop replacement business, it needs a way to update Chrome.

The ability to add features to Chrome is built into the terms of service, and Google will want to publish fixes as well as new features like, say, a P2P client. Security experts, quick to attack Microsoft for other failings, praise the robustness and security of Windows Updates; Google needs a good solution too.

If the acquisition goes through, Google will get a ready-made, commerce-enabled, geographically proven platform for multigigabyte content distribution. It will also be able to keep Chrome current and address any zero-day exploits that might emerge. It’s a smart move that both software publishers and content delivery networks need to watch closely.

Update: Several pubs have contacted the companies in the hopes of confirming the story, but all have been told that this rumor is just that — a rumor, and nothing more.

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