Twitter Promoted Tweets on Google a Prelude to Acquisition

By Clint Boulton  |  Posted 2010-12-21

Twitter Promoted Tweets on Google a Prelude to Acquisition

Google's inclusion of Twitter's Promoted Tweets into its real-time search results represents more than just the first time Google is including ads not fueled by AdWords on its properties.

It sets up the possibility that Google could acquire Twitter at a later date, according to Paul Byrne, a senior account manager at search engine optimization specialist Greenlight.

Promoted Tweets marks Twitter's first foray into online advertising, letting advertisers such as Starbucks pay $100,000 to push their products on Twitter. The ads are available on and through Twitter partners, which is how they landed on Google's Realtime search page.

That move is an upgrade from the previous arrangement, where Google has been paying Twitter to index its stream of tweets on its real-time search engine.

Byrne, a former relationship manager at Google in the U.K., said that though Twitter reportedly rebuffed acquisition offers from Google, the Promoted Tweets arrangement proves there are ongoing discussions between the two companies.

"With Google's stated goal of acquiring one new company a month, Twitter would seem a nice fit if both sides could agree on a price," Byrne wrote in a blog post Dec. 13.

"Google has a huge war chest to fall back on. It has a tendency to snap up leading sector companies when it can. We have seen this with Double Click and YouTube in the past. So why not Twitter?"

He noted that such a deal would benefit both companies and their advertisers. Tweets and Promoted Tweets could ultimately be seeded across Google's search properties, including Google News, Google Finance, Google Product Shopping, and Google Books. Twitter would undoubtedly reach more users than it currently can.

The deal would give Google sturdier footing in the social sector, where the search engine is weak. This is particularly necessary after Microsoft Bing embarked on deep integrations with Facebook.

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.


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