Lots of buzz tonight about a TechCrunch-reported rumor that Google is in serious talks to acquite Twitter. I can certainly see why Google would rather buy Twitter now, before the company gets any more expensive. They paid a pretty penny for YouTube and perhaps have learned to move more quickly on popular technology they can’t compete with themselves.
Why would Twitter sell now if its value can only go up? Well, they could implode: for all of Twitter’s accelerating traffic and relentless buzz, the company still seems far from figuring out how to monetize any of it. And there’s much larger Facebook, looming over Twitter and copying some of its successful ideas. I don’t know how risk-averse Twitter is, but I’m sure the decision makers there recognize the high variance on the company’s set of potential outcomes.
I’m not placing bets on the outcome, or even on the veracity of the rumor. Google and Twitter should be talking, so I don’t see why the two companies wouldn’t be. I suspect the more interesting question is whether they can find a mutually agreeable valuation. At least Google, unlike Facebook, won’t have to negotiate the value of its own stock.