The Noisy Channel

 

Twoogle?

April 3rd, 2009 · 2 Comments · General

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.

2 responses so far ↓

  • 1 Carl Grimm // Apr 3, 2009 at 12:25 pm

    I would say this may be defensive rather than offensive play by Google. Purchasing YouTube was in line with what you would expect an advertising provider to purchase; popular content to put its ads on. Acquiring Twitter may be for a more subtle reason.

    Twitter may be more dangerous in the hands of a Google competitor. With Google shift towards behavioral ads and rumors of dropping “don’t be evil,” I would say having the ability to mine your Twitter content and network could prove very valuable to them; perhaps that value alone could be enough to cover the purchase long term. With their massive computing centers I assume they could lower operating and delivery costs as well.

    With Twitter’s business plan looking increasingly like this being acquired by Google may be a home run for both.

  • 2 Daniel Tunkelang // Apr 3, 2009 at 12:30 pm

    Well, Kara Swisher is telling us not to get our Twitters in a bunch. In any case, I love the link to Twitter’s business plan. I see it’s dated April 2, which perhaps should be dubbed After the Fool’s Day.

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