Report: Google in Talks to Buy Twitter? Update: Probably Not

Posted by: Rob Hof on April 3, 2009

Google is in talks to buy the hot microblogging service Twitter, according to Mike Arrington at TechCrunch, who cited two unnamed sources in a post late Thursday. How far along the talks are—if they are indeed acquisition talks—is in doubt, however. TechCrunch first reported talks were in the late stage, then later updated the post to say they’re early, and that the two companies are considering working together on a real-time Google search engine.

OK, so while Mike often has good sources, even he seems to be implying it may be early to take this one to the bank. UPDATE: Kara Swisher at Boomtown says it’s not happening, no way, no how. Twitter cofounder Biz Stone also offered, well, not much of anything, saying in a blog post that “it should come as no surprise that Twitter engages in discussions with other companies regularly and on a variety of subjects” and going on to say he’s got some job openings. A lot of bloggers seem relieved that Twitter hasn’t been gobbled up yet, their belief that Twitter would wither under Google surpassed only by their even firmer conviction that its fate would be even worse if Microsoft bought the company.

There’s good reason to think Google is interested in Twitter, because as a number of people, including Mike, have pointed out, a good chunk of Twitter’s potential may be in search. Twitter, which recently introduced a search feature and just announced plans to expand it soon. Twitter would instantly add to Google search an immediacy it currently doesn’t have.

What’s more, Twitter would give Google the credible play in social networking it has lacked outside of its Orkut service, which is popular in only a few countries, and not in the U.S. As for Twitter, its frequent outages and glitches show it needs a bulletproof computing infrastructure like Google’s.

Finally, it’s clear from my recent conversations with various Google people that they’re watching Twitter very closely and are intrigued. Vic Gundotra, who heads Google’s software developer and mobile efforts, said Friday morning at the Web 2.0 Expo in San Francisco that he’s a “big fan” of Twitter but declined to comment on the rumors of a deal.

But just because a combination seems to make sense doesn’t mean it will happen at any price. I think even Google will think very hard about spending hundreds of millions of dollars on a company that makes virtually no money and has left everyone guessing how it might do so. Maybe it should anyway, but I don’t think it’s a slam dunk, especially given Google’s newfound parsimony. Indeed, in a new post, Mike says Twitter wouldn’t take less than $1 billion. All the more reason to think Google will think thrice before pulling out the checkbook.

I wouldn’t be surprised if Twitter sold out to someone, and Google is the most logical buyer. If the price being dangled is high enough, and it’s getting pretty high at upwards of a quarter-billion dollars, its executives and VC backers will almost be compelled to take it in the face of the considerable risk that Twitter can’t fulfill the sky-high expectations placed on it. And that price could rise even higher if Microsoft gets into the bidding. After all, Facebook apparently offered a half-billion dollars a few months ago, albeit with privately held stock that may be worth less today.

But for now, it seems doubtful Twitter and its potential suitors will be able to find common ground on a price.

Reader Comments

Ghost

April 3, 2009 1:05 PM

What, exactly, is the (unique) product that Twitter provides? What Twitter search functions and features would Google (or any buyer) get from Twitter that it already can't do on its own?

Answers: none and none.

@twitteidoo

April 3, 2009 1:28 PM

Poll: Do you think it is a good Idea if Google buys Twitter???
http://poll.fm/wfrt

Trina L. Grant | Professional Freelance Writer

April 3, 2009 1:32 PM

Twitter just purchased Helium and the stringent policy changes have rendered it a different service altogther. Trying to corner the market, eh? The best part? Unless you have Chrome as your browser, you won't even be able to use Helium. They will no longer even support searches that lead to Helium from any other search engine except Google. They tout the supposed benefits, noting that Google will cause there to be a 10% increase in over-all earnings. This whole idea seems to me like a time-machine in reverse. Didn't AOL come out of the gate with an exclusivity that eventually negated its relevance to the outside world? Hello? AOL, where are you? Oh, yes, you joined us out here where all the other web-based applications hang out. Google better get a clue. They really supersede other sites as far as working well with other applications. Don't try to get to be too big, Google. Don't be a bogart, man.

Mitch

April 3, 2009 2:21 PM

I believe Twitter will hold off from selling it to Google. It will be worth way more if it holds on to it.

If it goes through, I wonder how it is going to effect third-party apps like www.flashtweet.com?

Trina L. Grant | Professional Freelance Writer

April 3, 2009 3:06 PM

Sorry about the mistake, folks...meant to say GOOGLE purchased Helium...sorry for any confusion. Kind of stole my own thunder there, lol.

Gooogman

April 3, 2009 3:07 PM

How come no one has picked up the bigger story yet? Google is in advanced talks with GM to buy Saturn to produce the Google car. Free cars that will download ads from a wireless network to display on the bumper and to the passengers inside.

Mike

April 3, 2009 4:10 PM

Twitter better do something it breaks constantly and many people will just give up on it. Twitter needs Google money, hardware, tech, and infrastructure. Google needs to let Twitter do what it does best.

amanda

April 4, 2009 2:58 PM

You are all funny.

Twitter has no revenue model or value whatsoever.... facebook can not even monetize their traffic and twitter will have an even less likely chance... users do not equal value anymore, engagement also does not BECAUSE USERS HATE ADS REGARDLESS OF WHEN YOU INTRODUCE THEM!!!!!

If google bought them they would be the suckers..... there is no money there, but it is funny to read this BS like users without a real scalable path to revenue means value... LOL

AK

April 6, 2009 1:35 PM

@the author "After all, Facebook apparently offered a half-billion dollars a few months ago, albeit with privately held stock that may be worth less today." 100% Agreed. Business is business. It's about providing the right services/products to the right people at the right time, and earning money in return. Not generating traffic and buzz while figuring out how to earn a single dime!!! Where is the money in Twitter? Where is the money in the other web 2.0 wonders? Even YouTube doesn't bring much to Google bottom line. I mean, even the money made by some of them, is not enough to justify their valuation (think or Facebook here). Just like those web based email services, Twitter might never make any dime. The only reason those email services are still around is because they are owned by companies (MS, Yahoo, Google) who are earning dollars in their other business channels. So either Twitter get bought, or it'll die. The same goes with Facebook...

James

April 6, 2009 10:44 PM

I keep asking myself, why do so many people give a hoot that some guy ate a ham sandwich for lunch or some tween is listen to Pink's new track or about some other person's opinion on some convoluted subject? I agree w/ Amanda above... where is the biz model that will monetize the traffic and so what if there are 5+MM twitter folks sharing "stuff" who cares?

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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