Now I'm Just Confused: Google Closes Slide

What a weird week - and I'm not just talking about the unusual geologic and meteorological events.  The Internet's dominant players are walking back from major initiatives, canceling projects which they once touted as central to their future business. First, Facebook axed Places, the mobile check-in feature which was supposed to compete with Foursquare. Now Google is closing Slide -- the social game and multimedia app developer it bought for $200 million one year ago.

Am I the only one who is surprised and even more confused by this development? I freely admit I am not privy to the inner workings of Google, or what CEO Larry Page is thinking about the strategic direction of the company, but the decision to close Slide strikes me as simply bizarre, considering the history (and ambitions) of Google's social media sallies.

Back when Google bought Slide in August 2010, the acquisition was supposed to be part of Google's larger social media push -- a long-term project, following the failures of Wave and Buzz, meant to make Google competitive with Facebook, which was taking up more and more time spent on the Internet. The social media initiative, which finally bore fruit with the launch of Google+ in June, was (and still is) intended in part to reinforce and strengthen Google's core search product with social data. In October 2010 former Google CEO Eric Schmidt explained: "Over time we will add additional social, if you will, ranking clues. Fundamentally, we want to make search more personal, and as we get more information about who your friends are, we can make search that much better."

So far, so good: it's no secret Google wanted into social media, and was prepared to spend goodly sums to get there. And while Google mobile exec Hugo Barra could assert in November that "We're not working on a social network platform that's just going to be another social network platform" -- i.e., that Google wasn't going to just copy Facebook -- the search giant was clearly open to borrowing good ideas from the world's largest social network.

That's where the online gaming came into it: Google realized that it had to find ways to engage users with its social media platform, and Google execs couldn't fail to notice that one of the biggest drivers of user engagement on Facebook is casual gaming, pioneered with such success by Zynga's Farmville, a.k.a. the mother of all time-sucks. The Slide acquisition was supposedly part of a long-term strategy aiming to build casual gaming into the Google social media platform, alongside (or in collaboration with) other potential gaming partners like Playdom, Electronic Arts, Playfish, PopCap, Wooga, and Zynga itself, in which Google bought a significant stake around the same time.

Fast forward to the present, and Google clearly isn't giving up on casual gaming -- in fact, it looks more important than ever, as Google+ tries to build up its user base and engagement. Earlier this month, Google unveiled Google+ Games, with generous terms (Google only gets 5% of revenues generated via "microtransactions") which are obviously intended to woo game developers with an eye to increasing the number of games on offer. And this is important, as Google+ currently offers a relatively small number of games compared to Facebook (16 for Google+ versus thousands for Facebook). That's understandable, considering how new it is, but all the more reason to muscle up if it's going to compete effectively.

Perhaps even more important, Google+ Games needs to improve its social interface: Facebook's platform is still superior when it comes to allowing game-players to socialize, including online chatting, meeting new people, competing with each other, and the like. Again, it's understandable that this isn't perfect yet, as Google+ Games just launched, but wasn't the whole idea to build user engagement through casual gaming? The community piece is obviously crucial here.

All of which makes the decision to close Slide rather mystifying to me.  Setting aside the fact that Google paid $200 million for it (I guess that's chump change for them), Slide seemed especially well-suited to tackle the challenges listed above: as far as I know it was Google's biggest in-house game resource, and as noted its expertise was in combining casual games and social media apps. 

Many observers noted that Slide's work wasn't coordinated with Google+ or Google's other social projects, as the company was allowed to operate almost autonomously, meaning some of its products (now axed by Google) were redundant with features of Google+. People are also quick to point out that Google's top management has changed since then, as Larry Page replaced Schmidt as CEO. All this may be true, but it seems to me like a damning critique of how the company is run: after all, what is the point of buying a company, failing to integrate or coordinate its activities with your larger enterprise, and then, a year later, shutting the whole thing down?  Even allowing for a change in leadership, it's a bizarre sequence of events.
1 comment about "Now I'm Just Confused: Google Closes Slide".
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  1. Andre Szykier from maps capital management, August 26, 2011 at 5:32 p.m.

    I suggest that companies like Google and HP have a penalty clause in acquisitions that says"..should we be stupid enough to close down any acquisition within the 1st year, we will donate an equivalent amount to education; and if in the second year, 75% of said amount....etc".

    Just because you have a high stock valuation, does not mean that you should not learn from your failures. After all, Steve Jobs successes were formulated on the fires of his mistakes. Go Jobs...may your health be perfect.

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