A couple of weeks ago news surfaced that could have potentially huge ramifications. Google and Twitter announced that tweets will now appear in desktop searches, as they have done on mobiles since May. The news itself was announced with nothing more than an update to Google’s original blog from May, and a couple of cringe-worthy tweets.
It further fuels the rumours, though, that the search engine might be considering making a bid for the micro-blogging site. To be clear, neither company has suggested anything of the sort, but rumours suggesting as much have been swirling since April and, the more you think about it, the more it makes sense. The deal to bring tweets to mobile and desktop searches is great for both companies. Tweets will immediately become more visible while simultaneously demonstrating that not all of Twitter is people writing what they had for lunch. Google will be able to tap into the breaking news that Twitter does so well – it’s much quicker to publish a 140-character tweet on breaking news than even a short article – as well as the global conversation that surrounds major events. A cyclical relationship is formed in which Google searches are enhanced by the very latest news and Twitter is able to sell advertising space through the search engine’s DoubleClick Ad Exchange.
The companies are compatible in other ways as well.
Google has long wanted to move into the social media business, though its efforts with Google+ haven’t really paid off, and the company announced earlier this year that it would reduce its focus on the service. With Facebook’s announcement that it’s created a rival to Siri and Google Now, though, the lines of the internet are blurring, and search engines and social networks are becoming more similar. Google can’t afford to get left behind. I’m sure it won’t, but buying Twitter would certainly put it at the forefront of social media.
Now would be a good time to acquire the company, too. With its share price at around its US$26 IPO price, the company has never been cheaper, with a US$18.3bn market cap at the time of writing. Google has nearly double that amount in cash reserves outside of the US alone. If Google did decide to buy Twitter, it would get immediate access to 316 million active monthly users. The company is making money, with revenues of over half a billion dollars in the last quarter, but user growth has slowed recently.
That could be about to change, though, with next year’s US Presidential election and a potential Brexit both playing to Twitter’s strengths as the place for breaking news and the ensuing conversations. Of course, all of this is just speculation, and Google might not have any desire to buy Twitter at all, but the arguments for doing so are certainly compelling.
Do you think this acquisition makes sense? Let me know your thoughts at moira@thembsgroup.co.uk and have a brilliant weekend!