Why Google should buy Valve

How search giant could become the iTunes of gaming

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Games company Valve has denied rumours that it's set to be purchased by Google but there are many reasons why Google should buy Valve...

Google has a long history of sticking a finger into the latest web pie, whether that involves making its own – see Google Chrome and Gmail – or buying up the established market leader – YouTube and Blogger, for instance.

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Right now, gaming is the big thing. On both PC and console (but especially on PC), there's a gradual shift away from disc-in-a-box and towards direct download. It's more convenient, it can be an obstacle to piracy, and hey, it's better for the environment.

The thing is that the various game download services are incredibly splintered at the moment. There are dozens of these things around, big and small. Gametap (still largely US-only), Direct2Drive and Steam are the clear leaders, but there's a lack of standardisation in both pricing and content.

In other words, there's still room for an iTunes of gaming, one giant that defines an entire up-and-coming industry, and everyone's going to want to be it. Valve and its Steam service have both the content and credibility to become it, and Google is one of very few companies that could theoretically scoop up this notoriously independent firm.

What would Google get?

There would be three particular benefits of doing so. First, money. Most Google services are in the woolly realm of data and advertising rather than direct coin. If it owned Valve, it would get hard cash for every game purchased from Steam (and, was Google to supply them, also for every server rented out to keen clans). Google would become a silent games publisher, and there's big money in that.

Steam's catalogue swells every week, with games both new and old, and in time it will be a one-stop shop for any PC game anyone wants, ever. The iTunes of gaming.

Google's involvement might even be enough to persuade the third-party publishers which are resistant to Steam – specifically, EA and Activision-Blizzard (formerly Vivendi) – to come on board. Which would be good news for gamers, but better news for Google/Valve. Even the tiniest tithe taken from every sale adds up to an incredible cashpile.

Secondly, is that aforementioned woolly data. Gamers are a significant slice of the internet, and owning Steam, with all its neat community features and in-game statistic/achievement tracking, would give Google a clear look into that major demographic's window.

In terms of selling usage statistics and analytics to advertisers and publishers, it could be astonishingly lucrative. Almost everyone who plays PC games knows what Steam is, and most of them run it. That's only going to grow.

Building the Google empire

Thirdly, it's another way to consolidate the Google empire – adding another facet to that omnipresent login that already gets you into Gmail, iGoogle, Google Docs, YouTube, Blogger... You sign in to one and you sign in to the lot, and so Google gets to monitor what you do online, all day every day, collecting those precious usage statistics and better targeting ads at you.

It's what Microsoft originally planned with its Passport system years ago, but didn't manage to achieve due to a killer combo of clumsiness and too much too soon. Steam is on its way to becoming a gaming Facebook – and you can bet your grandmother's knickers that Google wants a Facebook of its own.

And hell, let's go for a fourth. It keeps Google cool. It's forever on the verge of becoming another Microsoft (in a negative sense), but association with trends, with the stuff people love to use, staves off that reputation.

It's the company behind all the free stuff that people live their online lives by – owning Steam would only increase people's affection for Google while turning a blind eye to the fact that it silently monitors everything they do.