Google is reportedly in serious talks with Twitter, the upshot of which could be either an outright purchase of the microblogging site or a partnership in a real-time search engine, TechCrunch reports. Either way, it's good news for Google, which has struggled to spread its wings in social networking.
TechCrunch cites two unnamed sources close to the negotiations who say that Google is in the late stages of finalizing a deal to buy Twitter outright for an amount "well, well north of $250 million." Twitter turned down a $500 million offer from Facebook not too long ago, and the smart money says the Google deal will fall somewhere between those two numbers. And while it probably won't reach $500 million, the Google deal could be more valuable for Twitter since Facebook based its price partially on its own overvalued stock. Google's offer, by contrast, would consist primarily of cash and publicly valued stock, a much more concrete--and attractive--deal in Twitter's eyes.
The synergies for the two would be perfect. Google would get a foothold into one of the hottest social networking sites today, while Twitter could get some deep pockets and savviness in search, the next big foray for the microblogging site. As this CNET report states, Twitter is increasingly about search:
Twitter has been working to elevate the prominence of search, which can give a near-real-time window into what's on the mind of innumerable users. And Google knows well how to treat new sources of information as signals that weigh into search results.
You can just see advertisers salivating over the marriage. Imagine getting a real-time look into what people are saying and thinking about your brand in real time? And imagine what advertisers would be willing to pay Google/Twitter for such exposure and feedback? In one fell swoop, Google gets social networking cred, a nice chunk of new online ad real estate and a strong ad dollar engine, while Twitter finally gets a robust monetization scheme. Not bad.
But perhaps Google isn't yet ready for an outright purchase. An update to the TechCrunch report cites yet another source saying the discussions are in a fairly early stage and could result in a simple partnership between the two firms to build a real-time search engine. That works too. Google could still get the ad real estate and burgeoning new audience without the risk of a purchase, while Twitter gets the search expertise and an influx of cash via ads.
Still, as we've said before, Google would be wise to strike a deal now, while the economy is down and prices for properties like Twitter are probably at an all time low. Twitter is fast on its way to finding its own monetization schemes--without Google's help (i.e. Salesforce's recent integration and Microsoft's Exec Tweets sponsorship). And it's bound to hit on the right combo sooner or later.
Google needs to swoop in now, especially before someone like Microsoft--which has its own search/social networking challenges--shows some interest and starts a bidding war. The early bird does tend to get the worm.
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The Source Seeker blog is written by Julie Bort, editor of the Open Source Subnet site as well as the Microsoft Subnet, Cisco Subnet sites. Indeed, Bort is the Online Community Editor for all of Network World. She also writes The Microsoft Update blog. If you have an idea for a blog, or a news tip on open source, Microsoft or Cisco, contact her at firstname.lastname@example.org, 970-482-6454 or follow Julie on Twitter @Julie188.
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