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An interesting tidbit came out of the Le Web conference in Paris last week. Twitter co-founder and chairman Jack Dorsey apparently failed to flatly deny that Google was planning on buying Twitter.
Apparently, he said “There have been no announcements” and when pressed on why he did not deny this — the way Twitter’s other co-founders Evan Williams and Biz Stone have — Dorsey offered a rather lame: “It [the answer] just came to me.”
Read into that the way you will, but I read it as there have been talks of late and that it has been on Dorsey’s mind.
I can understand why Google would want Twitter. That glut of social microblogging data would give Google something it sorely lacks: a comprehensive social network that is pushing Facebook, if not in user numbers in cultural social computing relevance.
Two things on my mind here. First, I surely hope Google does not buy Twitter. Second, Google has proven it doesn’t need to.
I’ve said this before, but I think the world needs Twitter to remain another standalone Web power pushing Google and Facebook to great innovation.
The only way I’d be for Twitter selling out is if I didn’t think it could make money from ads and subscription services to survive alone.
If Dell can bank $6.5 million in sales from promoting on Twitter, surely Twitter can capitalize on that with some premium services one day.
So, why doesn’t Google need to buy Twitter? It is already paying Twitter for the data!
I fully realize that Google and Twitter have been tightlipped about whether Google has paid Twitter for the Firehose API, but it has to be. It isn’t as if Google is doing a basic integration with Twitter.
In the course of seven days, Google announced three separate deals that involve putting Twitter’s data in front of users.
The search engine Dec. 2 began letting users sign into its more than 9 million Google Friend Connect sites with their Twitter login identification.
On Dec. 7, Google went nuclear on the real-time search space, indexing Twitter, news and blogs in real-time.
Just three days later, Google’s enterprise group began offering Twitter tweets in the Google Search Appliance. Clearly, Google is infusing Twitter across its Web services, both for consumers and business users.
So what more might Google get or even need from shelling out billions for Twitter? Why do I say billions when Twitter’s most recent funding round valued it at $1 billion?
Because in this day and age, one doesn’t simply pay a company like Twitter what it’s valued at. It pays multiple premiums. If Google is paying 10x revenues for AdMob, figure close to that for Twitter, which is the real-time data king.
In Twitter, Google would get a big 70 million-plus user base, give or take a few million. Then imagine the ad technologies with which Google would infuse Twitter to generate more revenues.
I realize I may have just made a case for why Google should buy Twitter, but why spend billions on a company when we can safely assume Google is paying a lot less for the same data?
Moreover, if Google does buy Twitter, it will surely attract antitrust scrutiny. Google is already building social search and indexing Twitter tweets. How does Google justify buying Twitter to the FTC and DOJ?
It really can’t without making it seem like a move to flatten Facebook and Microsoft Bing.