Google Should Buy Twitter to Battle Facebook but Won't

Analysts and pundits are torn on whether Google should buy Twitter to fight Facebook in the social media market. Dave McClure and John Battelle are among those on opposite sides of the debate.

When Google CEO Eric Schmidt was asked what he thought of Twitter Sept. 28 at TechCrunch Disrupt, he acknowledged that the microblog should be able to come up with ad products that are highly lucrative.

"We think they are going to do very, very well," Schmidt said, adding that the platform has scaled well.

While he declined to comment on whether Google would try to buy Twitter, his otherwise frank assessment triggered a new avalanche of discussion about whether Google should bid for Twitter to compete with Facebook in social media.

Facebook has garnered more than 500 million users in six-plus quick years. Google, which is twice as old as Facebook, has more than 1 billion searchers, but these folks come to its search engine for a quick information fix.

Facebook, with all of its content sharing and communications tools, is sticky. In August, the social network surpassed Google in total minutes users spent on the Website. The low barrier to entry and stickiness make Facebook a tantalizing proposition for social media advertisers.

There is talk that Facebook will soon partner with Skype for some VOIP (voice over IP) integration, which would boost its communications quotient. Worth a reported $33 billion on paper, Facebook's IPO will be the next hottest meal ticket when it finally comes in the next few years.

So forgive people when they say Google, which has fallen behind in the social media game after launching orkut, Google Social Search and other meek tools, needs to do something big to-if not steal some of Facebook's magic-temper its rise.

Dave McClure, founding partner of the 500 Start-Ups seed fund, told Reuters about Google:

"Is there a scenario where you think you don't have to buy Twitter in the near future? I don't see it. Whatever your math is, you better do it soon, because you're getting killed by Facebook."

Business Insider's Henry Blodget noted that in addition to the potential Skype integration, Facebook could build a search app "that starts siphoning some search revenue away from Google" or even replace the browser and desktop for some people, blighting Google's growth.

Buying Twitter, which has more than 160 million users, would significantly boost Google's place on the social media meter. Of course, not everyone believes Google has to buy Twitter, for what Blodget said could be $5 billion.

Forrester Research analyst Augie Ray scoffed at the idea that Google must buy Twitter to get credibility in social media. With $24 billion-plus a year in advertising, Google is doing just fine without it.

Ray added that Google is building up its social media arsenal with smaller acquisitions, such as Slide, Jambool, Angstro and SocialDeck. Leveraged appropriately for Google's 1 billion searchers, Ray believes Google still has time to prove its merit in social media.

"Google is facing no problems so pressing that it needs to leap into an acquisition merely to appease those who feel it has a social media credibility problem," Ray concluded.

Drawing on the history of Twitter's management, search engine expert John Battelle said Google won't buy Twitter because the company won't sell to Google or anyone else.