Facebook App Consolidation Continues: SGN Acquires (fluff)Friends

As the Facebook Platform continues to mature, larger app developers are swallowing up smaller ones in a race to create economies of scale and barriers to entry. Tonight, Social Gaming Network announced that it is continuing that trend by acquiring (fluff)Friends, one of the most popular Facebook applications, for an undisclosed sum.

(fluff)Friends was one of the earliest successes on the Facebook Platform, launching when the Platform debuted in May of 2007. Founded by Mike Sego of Google and Julie Zhou of Facebook, (fluff)Friends had over 100,000 users one week after the Platform launched, making it the 14th most popular Facebook app one week in. Zhou has since stopped working on (fluff)Friends, presumably to avoid any potential conflicts of interest.

Since then, (fluff)Friends has gone on to become one of the richest and most well developed apps on the Platform. (fluff)Friends lets users adopt virtual pets, interact with their friends’ pets, and earn virtual currency to spend on things like food and customizable habitats. Mike Sego has regularly appeared at industry panels on issues related to social game design discussing the game’s unique combination of virtual world, MMO, and social game characteristics.

SGN was likely attracted to the robust economy within (fluff)Friends, which is driven by a rich combination of incentivized user interactions, offers powered by Peanut Labs, and direct virtual currency purchase via Paypal. SGN says (fluff)Friends has seen a 192% increase in revenue per spender and a 143% increase in spend per transaction since January of this year. See Inside Social Games for more details on the (fluff)Friends economy.

“We are thrilled to welcome (fluff)Friends into the SGN family,” said Shervin Pishevar, CEO of SGN. “SGN believes in (fluff)friends community and we thrilled in investing in building (fluff)friends. This acquisition will help us continue to provide a unique social gaming experience for our Facebook users, as well as enhance our monetization capabilities across the network.”

The acquisition marks the next step in the battle between SGN and Zynga (and now RockYou) to build the biggest social gaming and application network on Facebook. The companies have been acquiring independent developers at a torrid pace throughout 2008:

With the acquisition, (fluff)Friends brings over 1 million monthly active users to the SGN portfolio.

Last month, SGN announced an investment by Bezos Expeditions. In May, the company raised a $15 million Series A round lead by Greylock Partners and Founders Fund.

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