Friday, April 3, 2009

Will Google Acquire Twitter

Rumors have surfaced up that the number one search engine Google is in late (early according to some) stages to acquire Twitter for an undisclosed price above $250 million. Twitter has recently rejected an offer by Facebook for $500 million worth of Facebook shares.

Why would Google want Twitter? Michael Arrington argues Twitter's real value is in search. It holds the keys to the best real time database and search engine on the Internet, and Google doesn't even have a horse in the game:

More and more people are starting to use Twitter to talk about brands in real time as they interact with them. And those brands want to know all about it, whether to respond individually, or simply gather the information to see what they're doing right and what they're doing wrong. And all of it is discoverable at search.twitter.com, the search engine that Twitter acquired last summer. People searching for news. Brands searching for feedback. That's valuable stuff. Twitter knows it, too. They're going to build their business model on it. Forget small time payments from users for pro accounts and other features, all they have to do is keep growing the base and gather more and more of those emotional grunts. In aggregate it's extremely valuable. And as Google has shown, search is vastly monetizable - somewhere around 40% of all on-line advertising revenue goes to ads on search listings today.

Frankly speaking, I have never used Twitter and it is extremely unlikely that I will post my feedback there about the products and services I happened to buy. Nor will I base my future buying decisions on Twitter data. The opinion of one person that I know and trust is more credible for me and is more likely to affect my decisions rather than the aggregate feelings of the masses, but that's me. For all I know, some companies like Starbucks for example, regularly scan blogs for customer feedback and critics, and they take it very seriously. Write something negative about Starbucks, someone will contact you. Hence, there is value here for companies, not for marketing but for realigning and improving their products and services.

Another reason for Google can be protective action. Just like they bought Feedburner and Blogger, we can assume that it is better in the long run if Google owns Twitter rather than a competitor; it is a popular service and has some search and market analysis value.

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3 comments:

Dr.Bruce said...

Google is like a black hole that devours everything in its path. Reminds me of the talk about Microsoft a few years ago.

I am new to Twitter and it makes sense that a major corp will grab it soon.

Archiver said...

In a sense you are right. Microsoft did great things to bring the PC experience to the masses from laboratories and expensive corporate IT departments. Then, something went wrong. It became over protective and alienated the hackers (using the term in an old fashioned way) who helped them achieve a stronghold in the operating systems arena.

So far, Google has not done such mistakes but time will tell.

Archiver said...

Added: For further analysis, read Kirkpatrick's post. He concludes:

"So there's the Twitter-sphere for you! Bring on 'real time search,' bring on a globally connected community, bring on vapid, vile, stupid shilling. It all seems pretty sad to me."

How to sell your soul on Twitter

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