Rumors have been flying around that Google is hot to buy Twitter. Makes sense to me, since I see Twitter as a real-time search tool with a billion points of light (users) who can get the most up-to-the-minute answers to almost any question. This has cooled off in the last week or so — but it still makes more sense to me than some of Google’s other acquisitions. Why not own your most threatening competitor (much as I would not like to see that happen)?
In the past couple days, though, other stories have emerged that suggest that Twitter and Google might be dancing to a different kind of tune.
First up, in a Google to Acquire Twitter post from a couple weeks ago, Techcrunch‘s influential Michael Arrington said that Twitter and Google were in “late stage” negotiations on a purchase in the neighborhood of $250 million. Arrington also believes Twitter is a search engine, like I do, and thinks it makes good strategic sense for Google. But: Twitter insiders apparently think the company’s value is closer to $1 billion — plus it’s beginning to dawn on people that Google acquiring Twitter might raise anti-competitive warnings among regulators. On April 3, Twitter’s co-founder Biz Stone posted a brief reply that of course they were talking with other companies, but that they had every intention of building their own firm.
Then, on April 9th, Kara Swisher published a long article called Who Will Be Twitter’s Best Search Friend? with the remark that the hot property of the moment in Silicon Valley has been pursued before (notably by Google and Microsoft – who obviously have some of the deepest pockets) – she mentions Microsoft’s purchase of a tiny part of Facebook for $240 million after a lengthy battle with Google (who won that battle is an open question). Finding a way to get ad distribution on Twitter would be a coup for either of the biggies — if there is a model that works. The attraction of Twitter is that huge and growing audience, and the fact that it has a model whose applications are continuing to grow. Lots of big companies are buzzing around it, attracted to all that mindshare.
Updating all this, Claire Cain Miller published an interview with Fred Wilson, one of the investors in Twitter, in the April 16th NYTimes, with the summary that: Yes, Twitter is talking to big Internet companies about forming partnerships with them. No, it is not looking to sell itself. Wilson says that Twitter has reached the scale (#3 social site in the US now, after Facebook and MySpace) that other people take seriously, but it is working to find out how to leverage its scale and model in distribution deals with other large properties like Google and Microsoft.
Then, finally, today sees an NZ site called The National Business Review reporting on Google’s recent healthy profits and Eric Schmidt’s (Google CEO) praise for Twitter. They note that this could be part of the competition with Microsoft, trying to butter up Twitter to favor a Google deal for ad distribution. On the other hand, they also report that rumors persist that Google and Twitter are still in purchase talks, stalled over price.
I hope Twitter stays independent, much as I like Google. I don’t see how Twitter could replace Google’s archive search, or vice versa, but melding the two would still reduce competition in this market.