With Inbox Clogged With Admirers, Twitter Should Ignore the Hype and Get Back to Work
The hubbub that was created around a rumor that was floated late last week that Twitter was in “late-stage” negotiations to be acquired by Google–which BoomTown reported was premature–definitely resulted in one certainty.
Every business development exec in media and tech rushed to lob in a we’re-interested-too communication to its founders–most specifically CEO Evan Williams and Chief Creative Officer Biz Stone–creating an email tsunami directed at the hot microblogging service.
“My inbox is flooded this morning with requests for a response to the latest Internet speculation about where Twitter is headed,” said Stone, in a post titled “Sometimes We Talk” on the company blog on Friday.
Sources close to the company said its execs were pinged relentlessly by a plethora of big companies, all wanting to make sure Twitter called them in the event the company was up for grabs.
And all–from Microsoft (MSFT) to Time Warner (TWX) online unit AOL to Yahoo (YHOO) to News Corp. (NWS) and, yes, Google (GOOG) too–are indeed watching Twitter very carefully to either partner with or acquire outright.
But it takes two to tango. And–although Twitter did indeed conduct serious talks to be acquired by Facebook last fall, which did not come to pass–it was not on the block to the search giant or anyone else this past week.
The companies, many sources told me, have been talking about a serious product partnership around real-time search, which is often a prelude to discussions on deeper ties and creates a bond between companies that could result in some larger acquisition deal.
This is entirely typical for Silicon Valley, where the game of push-me-pull-you is common among companies. Stone is only partially right: All the time everyone talks.
I have almost no doubt that Google’s intent in talking to Twitter is motivated by a lot more than sharing search results better.
Simply put: It needs Twitter in its orbit. But what that means right now is still undefined.
Google, for example, has long worked with AOL on delivering search on the online service. Then, in a renewal of the deal, it paid for some equity, investing $1 billion for a five percent stake in 2006 (interestingly, Google later wrote down some of that investment).
Could such a thing happen? It seems a more interesting idea than a bigger deal to swallow Twitter whole.
That’s also because sources close to the company have said many times to me that Williams, especially–who already sold his Blogger start-up to Google in 2003–is not interested in selling out as yet.
Of course, using simple logic and the fact that everyone has a price, Twitter could still sell itself off at any time–especially, if there were an overwhelming cash offer for the company.
And as I have written even before this latest explosion, Google is indeed its most likely acquirer.
I wrote in February:
“And I do understand why Twitter–flush with venture funding and an allegedly low burn rate–might want to bide its time to see what happens and not sell out too early.
But while the hot microblogging service declined to sell to Facebook, it might want to reconsider if Google or Microsoft or a big telecom company comes calling with, say, a $1 billion check.
Why? Simply because Twitter–while it says it is poised on the verge of announcing its grand plan to make money–is operating in an arena I have seen many other shooting stars in, traversing a very dangerous crevasse of hype and expectation.
Due to that, it has a very big red target on its back, one that a competitor in the status space–such as the spurned Facebook, whose update business is much bigger–will not ignore.
Right now, Twitter could ask for a lot, as one of the only Web 2.0 companies that everyone is uniformly excited about.”
In fact, many sources I spoke to said the search giant will not shirk from trying to buy the company if it thinks it needs Twitter, especially related to its growing importance in real-time search.
And, Google can certainly move fast, as it did when it paid $1.65 billion in stock for YouTube in 2006. It snatched the video service start-up from the hands of Yahoo in one night, said many sources.
Lastly, added many of those sources, it will also not blink in paying up for the revenue-free and profitless Twitter if it thinks it needs to own a category, even though Google has now been dinged by Wall Street for paying too much and now losing too much on YouTube.
“If Google wants a company and thinks it is key to its future, it would buy it without worrying about much else, if it could,” said one source. “And it will do it quickly without a lot of muss and fuss.”
Personally–and this is my analysis alone and not based on any source–I think Google has to partner with Twitter strongly, as I reported it is currently trying to do, and think long and hard very soon about buying Twitter and should definitely not let anyone else do so.
But sources I spoke to uniformly denied Google was ready to deliver that giant bag of money to Twitter last week.
And Twitter was also not ready to receive one quite yet.
This was a sentiment reinforced this weekend, as I did more reporting on the story (we like to double dot all our i’s and cross our t’s here at All Things Digital).
Williams even told staff as much at a meeting on Friday, due to the unbelievable reaction generated by the ever-changing Google-about-to-buy-Twitter report by TechCrunch.
(By the way and of interest to only those who like blogger disagreements–my issue with the post by TechCrunch was loudly declaring that the deal was almost struck, which it was not, and then changing its report–and headline–to report different developments.)
Interestingly, Twitter’s Williams did not do so, sources said, during the Facebook talks, as news of those actual negotiations never leaked until later and was then reported in this column in detail.
Such a descent into Twittermania was as inevitable as the air, of course, after even a hint of possibility that the media-overhyped start-up–which is unquestionably also an important conceptual game-changer in the online space–was in play.
But how much it should let itself get caught up in such a roundelay of acquisition blather is something its execs and investors have to think long and hard about now.
Because, as many know, living in such an overheated terrarium of breathless expectation always ends up with withered focus on what’s truly important.
And that is: A commitment on the part of Twitter’s management and staff to follow through and build a substantial and profitable business on the back of what is a profoundly promising beginning.
Twitter’s Stone said as much in that post: “Our goal is to build a profitable, independent company and we’re just getting started.”
As a chronicler of the Internet sector’s proclivity to shine too bright a light on the one company of the moment, I think Stone’s declaration is exactly right.
While I often make fun of Twitter’s current lack of a business plan (Snuggie-Tweet is genius!), it is clear that it is onto something significant and perhaps even something quite profitable someday.
That is, providing its execs focus on what’s important–building Twitter’s business and audience–and trying as hard as they can to ignore all the noisy and pointless tweeting from and about its many suitors.
If they can’t, though–and it would be a crying shame–they should just start responding to all those pretty swains and sell out to the highest and most attractive bidder.
Personally, I am hoping they pick the former, as Twitter is turning out to be yet another of Silicon Valley’s great stories of possibility and promise.
Please see this disclosure related to me and Google.