Google Sees Games as a Weapon in Facebook Battle

The Wall Street Journal has added fuel to recent reports that Google (s goog) is working on a gaming-based social network as a way of competing with Facebook. Word first leaked out about the project — reportedly code-named “Google Me” — in a Twitter post by Digg co-founder Kevin Rose last month. The WSJ said unnamed sources have confirmed that Google is working with several large game developers, and quoted CEO Eric Schmidt as saying that “you can expect a partnership with Zynga,” the market leading social-game company. Google reportedly invested in Zynga¬†earlier this year.

Schmidt didn’t confirm that Google is building a social network based around games, but when asked whether the web giant was working on a Facebook competitor, he said that “the world doesn’t need a copy of the same thing,” which suggests that while Google wants to compete with Facebook, it is not trying to create a clone of the social networking site. Pressure to come up with more social features has likely been building at Google as Facebook continues to draw interest from advertisers who want to target users based on their relationships and social activity. The search company as yet has no real way of offering that kind of social element.

Google clearly sees games as one way of acquiring more social information about its users so that it can fill this gap. Even before the reports of a Google Me project based on games, there were signs that the search company wanted to boost its presence in the social-gaming or “casual games” market. It hired game industry veteran Mark DeLoura earlier this year to fill a job called “game developer advocate,” and also acquired a social-gaming company called Labpixies.

The social-gaming market has been heating up recently: Walt Disney Co. just acquired Playdom, one of Zynga’s main competitors, for as much as $763 million, and Zynga itself has reportedly raised more than $365 million in financing over the past year from venture funds such as Russia’s Digital Sky Technologies and Japan’s Softbank Capital. Zynga’s potential market value has been estimated at close to $5 billion, based on the number of shares outstanding and the growth of the company’s business.

Whether building a game-based network can help Google compete with Facebook remains to be seen, however. The web company has tried to develop more social features in a number of ways, but the launch of services such as Google Buzz and Google Wave have largely failed to generate much of a response. Some have argued that the company simply doesn’t understand social networking, since its other products are focused primarily on engineering-related concerns such as producing better search results. The company has been looking for a “head of social” to help co-ordinate its efforts, but so far no one has stepped up to take on that challenge.

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Post and thumbnail photos courtesy of Flickr user Stefan