Yahoo! about to announce games deal with Offerpal to compete against Facebook

Yahoo! is apparently getting into bed with Offerpal with dreams and desires to create a viable multiplayer gaming social platform to compete with Facebook.

According to SFGate.com, Offerpal will enable Yahoo! to monetize social games on Yahoo! Application Platform with plans to charge less than 30% to use the platform, unlike Facebook Credits.

Admittedly, Yahoo! is far from competing with Facebook as a social game platform. Facebook is the 800-pound gorilla in social games, they are growing and signing up leaders (Zynga, CrowdStar) to their Facebook Credit platform everyday. Game developers are willing to play Facebook 30% now because 30% of something is more than giving up 0% of nothing.

Yahoo! is a huge web site but they have proven themselves inept at capitalizing on the social web and there is no unified social graph across all of Yahoo! properties.

They do have two advantages over Facebook though:

1. Facebook is the unwittingly leader in social games. When you subtract out the public relations spin and focus on Facebook and its founder Mark Zuckerberg’s actions and statements, it’s clear they accidently stumbled on games. Apparently, Zuckerberg thought the platform would solve the world problems instead of making Facebook and its game developers tons of money. The changes Facebook is making may be the right moves in the long term but their attitude toward game companies they don’t really care about social and casual games in the short term.
2. Yahoo! is just desperate enough to make the right moves to become a force in social gaming. Their web traffic and ad revenues are not growing. Yahoo! admitted defeat to Google and sold their search business to Microsoft. And, Yahoo!’s CEO Carol Bartz wants to make money, and not save the world. If she does not pull a rabbit out of the hat soon, Yahoo! is over. Social games may be their best bet to survive and they know it.

With Yahoo! about to do everything it can to become a leader in social games and Facebook willing to walk away for the sake of a better world, this could be the perfect storm.

It’s a long shot for Yahoo! to become a leader in social games (or MySpace, Google, Hi5 for that matter), but if this about who wants it more to be a leader in social games, Facebook would lose.

With their numbers of new gamers on Facebook dwindling, there are many social game companies secretly hoping that Yahoo! and its co-patriots can manage to take some market share from Facebook. In social gaming, competition on the distribution side is not just good, it’s necessary if this is to become a long term growing market.

Joel Brodie