Google To Acquire Twitter?

It’s just a rumor but…wow!

According to a report by TechCrunch, Google is in late stage negotiations to acquire Twitter.

From TechCrunch:

We don’t know the price but can assume its well, well north of the $250 million valuation that they saw in their recent funding.

Twitter turned down an offer to be bought by Facebook just a few months ago for half a billion dollars, although that was based partially on overvalued Facebook stock. Google would be paying in cash and/or publicly valued stock, which is equivalent to cash. So whatever the final acquisition value might be, it can’t be compared apples-to-apples with the Facebook deal.

Why would Google want Twitter? We’ve been arguing for some time that Twitter’s real value is in search. It holds the keys to the best real time database and search engine on the Internet, and Google doesn’t even have a horse in the game.

From Silicon Alley Insider:

One of Arrington’s sources says the deal is in “late stage” negotiations, while another says the deal is in “fairly early stages” and that the companies are also just talking about working together on a “Google real time search engine.”

There is a price for everything. But unless Google is offering a fortune — in cash — it’s too early for Twitter to sell itself.

Twitter is flush with cash, having just raised another $35 million at a $250 million valuation. Its growth shows no signs of slowing, it has little competition beyond Facebook — which has struggled to elegantly replicate Twitter’s real-time chatter — and has only just started trying to make money, with several revenue opportunities ahead.

If the price is right — $750 million to $1 billion in cash — Twitter and its investors are smart to take the money and run. Twitter doesn’t want to become the next Digg, which wasn’t able to sell itself at the peak of the Web 2.0 bubble, and now will have to do a lot of work to get a big deal. But we still think Twitter is in a very good position to become the “rails” that the real-time Web rides on… and that could be worth a LOT of money someday.

Meanwhile, why would Google want Twitter? It’s not making any meaningful money. And while that doesn’t usually stop Google — see YouTube, etc. — sales and profitability are more important today than in 2006.

The difference between Twitter and YouTube: Twitter actually has significant relevance to Google’s main search business. As Twitter’s popularity increases — which it is, rapidly — the idea of “real-time search” will be increasingly important to Google.