Google and Twitter Up in a Tree?

"Google needs to address this pain point," Byrne argued. "Working with Twitter is the best way to do this. Not only does it allow Google to offer its huge base of advertisers a new outlet and a step into the social world with a company it is used to working with, but it would allow Google to steal a march on Facebook and reassert itself as a complete Web company."

Byrne is hardly the first pundit to call for a Google-Twitter merger. Henry Blodget at Silicon Alley Insider regularly beats this drum.

However, the opportunity may have passed Google by in so far as how much it would be willing to pay for Twitter.

As Blodget noted last week, Twitter's asking price is bound to be a lot bigger in the wake of its $200 million investment round, which values the company at $3.7 billion. Silicon Alley Insider now pegs Twitter's cost to Google at $8 billion.

Then again, Google was willing to pay $6 billion for Groupon. One could argue: what's $8 billion when you have $33 billion on hand in cash?

An analyst who asked to remain anonymous because of the speculative nature of the conversation told eWEEK:

"I think there's a lot of sense to a hypothetical Google/Twitter deal, but the folks at Twitter give me the impression of wanting to stay independent," he said.

"Of course, money is money, so attitudes like that can change quickly. Ultimately, Twitter won't accept any deal that doesn't give it a great deal of autonomy-they still have big plans and ideas-but there are strong reasons for such a merger, including the ability to integrate advertising and search."

The two companies could still merge as both companies get cozy, integrate systems and find they have mutual vision and interests. 2011 should be interesting for Google and Twitter.