Google and Twitter - the rumour mill grinds on
April 8th, 2009 by Lloyd Gofton
The web’s soothsayers have been talking about Google acquiring Twitter for some time, but last week, the rumours seemed to have a bit more substance thanks to stories of a Google/Twitter deal and potential acquisition talks that started on TechCrunch and spread rapidly, as you would expect.
The original TechCrunch story has been updated three times, including an official denial from Twitter on Friday, and further discussion from various sources that agree or disagree that acquisition talks are going ahead.
What most people seem to agree on is:
1. Google wants a deal, but initially focused on real-time feed of Twitter updates to speed indexing, as it currently has to index each Twitter user periodically to look for updates. This is apparently the main point of the current discussions, and certainly makes sense for Google at least when you consider global visits to Twitter approached 10 million in February, up 700% from the same time last year, according to comScore, and this figure is only going to keep growing, which leaves Google with a big issue.
2. Twitter’s current valuation is $250 million following the recent round of funding
3. Twitter values itself at much more, some sources say closer to $1 billion at least
4. Twitter founders Evan Williams and Biz Stone have already sold Blogger to Google five years ago
So why would Google want Twitter? Well I think this quote from Jeff Mann of Gartner Research that appeared in Forbes sums it up well: “Twitter’s value is in its content, growing by 6 million tweets per day. Twitter is attractive because it has built a service that attracts this much volume, creating a constantly growing, twitching, seething real-time source of comments, news and opinions.”
Beyond that, Twitter is the real-time search engine for breaking news and comment, it’s also not a bad reputation engine and Google undoubtedly wants a piece of this, as mentioned in my post in March.
Why would Twitter want to work with Google? Well, beyond having done it before, Twitter has so much potential as a revenue generating platform, but seems to be having trouble in realising this potential. Could Google be the answer to get the business model moving?
Whatever the eventual result, i think it’s going to take longer than a week to resolve, and since the story first broke last week there has been much discussion, an example of which can be seen in this Paid Content article, but little in the way of movement. As we know, these things don’t tend to move quickly.
So, do i think Twitter will be acquired? Probably, but probably not this year until they have developed a few more valuable services, proved revenue generation and got that all important valuation up.
Tags: acquisition, google, twitter
