Google Buys Jambool: Social Networking Battle Begins
By Brennon Slattery
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.
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.
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.
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.