Google to Buy Twitter?

Jacksonville – Google is said to be in negotiations to purchase the microblogging site Twitter, according to TechCrunch blogger Michael Arrington. Arrington claims two unnamed sources have claimed that the deal is in the late stages of negotiations while another source claims they are only in the first stages. Whatever stage of negotiations the two companies are in, an overwhelming majority of technology bloggers believe that buying Twitter is a good move on the part of Google.

But what could Google possibly want with Twitter? Especially after a statement made by Google CEO, Earl Schmidt, a few weeks ago calling Twitter a “poor man’s e-mail system”.

There are many reasons why Google would want to buy up Twitter. Twitter’s value has continued to grow as quickly as its membership of tweeters has. Twitter’s worth recently jumped by $35 million with an estimated value of $250 million and shows no signs of slowing down. Between January and February of this year, Twitter’s U.S. membership grew by 3.7 million unique users. And even though Twitter hasn’t shown any meaningful profit yet, its growth potential is enormous.

Another benefit of Twitter is its use by hand-held browsers on phones. Who wants to pay for text messaging when they can message friends, family and even business associates on Twitter for free? That concept alone is helping Twitter grow by volumes.

The most significant aspect of Twitter that Google has their eye on is Twitter’s real-time search engine. This instant response of people to current issues and ideas looks to be the search engine of the future and Google doesn’t want to be left out. And, as Google is quite aware, search engines are where the ads are, therefore the money also. Approximately 40% of advertising online is placed on search listings and that accounts for a large chunk of money. While Google could realistically build its own real-time search engine, it seems more beneficial for them to buy Twitter instead. The main goal may be to make sure they own Twitter before Microsoft gets its hat in the ring.

But what does a site like Twitter cost? Twitter’s founders Evan Williams, Jack Dorsey and Biz Stone recently turned down an offer of $500 million dollars from Facebook. Most web sources agree that Twitter will probably not sell for any less than $750 million to $1 billion in cash. Of course, for a company like Google which generates over $1 billion dollars every two months, that amount will seem like pocket change. If Twitter continues to grow Google wins, if it dies then Google has a good tax write-off for the year.

For Twitter’s founders this may be the right time to sell. Twitter is on its way to the top but has yet to earn any relevant income. Google’s $1 billion dollars may be the right price at the right time. Two of Twitter’s founders are old hands at negotiating with Google; Stone and Williams sold their website “Blogger” to Google five years ago. Selling Twitter now, while it is still hot, may be another good decision on their part.

Whether or not Google buys Twitter, it is obvious that Twitter will have a good run for many years. That’s pretty good for a supposedly “poor man’s e-mail system”.