BoomTown Channels Miss Cleo: A Twitter Transaction? More Facebook Follies? And Will There Finally Be a Yahoo-Microsoft Deal?
This weekend on Twitter, someone paid BoomTown a compliment of a sort: “I read you because you are a solid fact-based reporter with a Miss Cleo intuition :)”
Yipes, because of being fact-based, I had to point out that the well-known-via-infomercials Psychic Friends Network shaman turned out to be a bit of a fraud, although she’s always entertaining, with her jaunty Jamaican accent (she was not, of course, from there).
Nonetheless, it got me thinking about how I would predict what would result from all the deal-making that is suddenly in the air, after six months of ennui from the current economic downturn.
While Silicon Valley has been less impacted than, say, New York, things have certainly been tightening up here, with layoffs at big companies and small ones and less frenetic activity than one had come to expect from Web 2.0.
But last week, the pulse seemed to quicken a little with the various rumors that have swirled around Twitter, the variety of controversies around Facebook and the nascent chit-chatting now taking place between Yahoo (YHOO) and Microsoft (MSFT).
Thus, with a third eye to the future, here’s my take on what could happen. Big caveat, though: Much of what follows is all my speculation and analysis and not based on any psychic feelings.
Last week, I did a rather long reported post on what was going on after rumors broke out that Twitter was in “late-stage” acquisition negotiations with Google (GOOG).
While an imminent deal was not pending two weeks ago, I wrote that Twitter was indeed the apple of Google’s eye at the moment–specifically and now more so than ever, many sources tell me, of its Search Product VP Marissa Mayer–for some kind of search deal that could eventually lead to an acquisition.
But I also noted that Microsoft was also in the picture, vying for Twitter’s affections, and I doubted that Microsoft and Google would be the only ones interested in the hot-as-July-in-Alabama microblogging start-up.
Here’s the plus for Twitter: It’s on a hype rocket ship, its growth is also accelerating and it does not need money, since it just got a big slug of venture funding.
And that’s also a minus and why I also predict that there are only two outcomes: a sale very soon or a major investment by one of its suitors.
While I would love for its founders, including Biz Stone and CEO Evan Williams, to stick to their claims of remaining a “strong, profitable, independent company,” a cash offer of over $500 million or a cash-and-stock offer of slightly more will probably be enough to take them off the table, mostly because the getting might never get this good again.
That offer is most likely to come from Google, if I had to make a bet, which is well known for moving quickly when it sees a tasty treat it desires.
That’s a shame, since once the start-up actually does enter these kinds of “late-stage” talks for real, some deserved shine will come right off Twitter’s cute little MINI convertible of a company.
Instead, Twitter might want to take a page from Facebook and let itself grow its own as it explores revenue options, while perhaps taking a large investment and striking a significant commercial deal with a strategic partner like Google or Microsoft.
Then, with a modicum of independence and the possibility of acquisition if it turned out it needed help, Twitter could forge its own destiny.
And wouldn’t that be nice if Google or Microsoft didn’t just gobble up every innovative thing they cannot seem to think of on their own?
I will be reporting more very soon on what’s been going on as the powerful social-networking site deals with its fast-growing pains–up to 200 million users now, which is about as impressive at it gets in the Internet space.
Not so impressive is the variety of high-profile management mishaps that have plagued the company of late–from its Terms of Service debacle to its redesign rough road to the way Facebook recently parted with CFO GIdeon Yu.
To say Facebook treated Yu–a well-regarded figure in the tech sector, who had also raised an awful lot of funding for the start-up–with very little of the kind of grace he deserved and that it should have displayed is an understatement.
In the creation of a significant start-up, tensions inevitably flare and there is typically a lot of management turnover, which is natural, for a variety of reasons on all sides.
Why Facebook had to insecurely tout its stable financial state while backhandedly slapping Yu by saying it was in a search for a CFO with “public company experience”–Yu had enough public company experience to make that deeply insulting–was unclear, when it simply could have said he was moving on in the way most such partings are done.
The conflict between its public statement and an internal memo I obtained on Yu’s departure underscored the problem.
Insecure and way too focused on optics is probably an issue Facebook will have to deal with as it moves toward what the company hopes will be in IPO in 2010 or 2011. Rather than all the noise, its only goal should be shaping up its revenue and profit performance and, hopefully, building a cohesive management.
But does that mean current CEO and founder Mark Zuckerberg will have to eventually step aside before a public offering and make way for a more experienced CEO type, as Google co-founders Sergey Brin and Larry Page did for Eric Schmidt, as some have suggested?
I predict not. Because, for all his careening from crisis to crisis of late, I have no question that Zuckerberg–who has fended off big-money acquisition attempts by big players with a cool-cucumberness that Twitter’s execs should study carefully–has every intention of riding Facebook to the very top–or even bottom.
Clearly modeling himself as a modern-day Steve Jobs (who was fired before triumphantly returning) or Bill Gates (a better comparison), Zuckerberg is a visionary techie who wants to style himself as a crack businessman too.
And with a lot of control over the fate of Facebook, he’s going to see his vision of Facebook and himself out.
THE ODD COUPLE
Can two divorced men share an apartment without driving each other crazy?
Oops, I mean can two once-bickering-over-a-hostile-takeover companies start talking without driving each other crazy?
Last week, the news, first reported here Friday, that Yahoo was involved in preliminary talks with Microsoft about an extensive commercial advertising and search partnership–should have come as no surprise.
After all, Yahoo and Microsoft are laggards in the lucrative search space, especially compared to the dominant Google, and they must somehow find a way to get along to get some traction in the marketplace.
But will they or will it be all Felix Unger and Oscar Madison battling until the end of time? While I loved that television show, and movie too, the Yahoo-Microsoft version is not riveting anymore to some.
“I am so bored with their not-coming-to-a-deal,” said one prominent exec, who was involved in the first go-round between the companies. “They need to make a deal, and if they don’t make a deal now, I will be both bored and in shock.”
That made me laugh out loud when I heard it. But it’s not funny, I know, because this is serious stuff!
Okay, then, seriously, this pair needs to come to some sort of partnership agreement like Miss Cleo needs a new reputation.
And, because I am a hopeful psychic, I predict they finally will, dropping all the emotion and history and realizing that they are wasting time and opportunity.
After all, while the future isn’t written, it can–a lot of the time–be both inevitable and utterly obvious.
Speaking of obviously (bogus), here is a video of Miss Cleo’s famous commercial:
Please see this disclosure related to me and Google.