Liz Gannes

Recent Posts by Liz Gannes

With Google Gone (For Now), Twitter Tries to Come to Terms With Microsoft’s Bing

After failing to strike an agreement to re-up its “firehose” data stream licensing deal with Google, Twitter is now trying to make sure the same thing doesn’t happen to a similar arrangement with Microsoft’s Bing search service, said sources close to the situation.

The outcome could mean a lot to both Twitter and Bing. Without a deal, the San Francisco microblogging service would be without two major paid distribution outlets for its full live stream of user tweets, a significant source of its revenue to date.

Meanwhile, Microsoft’s Bing — which is waging an expensive battle in a search arena dominated by Google — has the opportunity to be the only major search player with extensive access to social data from both Facebook and Twitter.

That is, if Twitter and Microsoft can come to terms, which is still unclear. Several sources said that the pair is still far apart on a number of issues, including the price and term of the data licensing, the way the tweets and advertising linked to it will be presented on Bing, the cut of that advertising and even how much traffic Bing pushes back to Twitter.

These are similar issues that Twitter had with Google, whose arrangement to syndicate the full fire hose of Twitter tweets expired on July 2.

After Twitter cut off the feed, Google took its entire real-time search product offline.

Twitter, sources said, didn’t expect Google to actually walk away. Google’s distribution is significant to Twitter (and obviously much larger than Bing’s), and tens of millions in revenue actually matter quite a bit to Twitter’s bottom line.

That relationship has also been become more tense as a result of the recent splashy launch of Google’s social network, Google+. The new social network is shaping up to be a competitor to Twitter — and a source of real-time data itself.

“Google likes to have leverage and this, at least in their minds, gives them leverage with Twitter,” said one observer. “But if Google is going to be the repository of all the world’s information, as it always touts itself as, it’s hard to imagine no Twitter in there.”

Indeed, sources said the two sides remain in contact over some renewal of the deal, despite the closing of the Twitter spigot.

The situation with Google should be a cautionary tale for Twitter when it comes to Bing, whose original Firehose deal — which like Google’s was signed in the fall of 2009 — was for six months longer than Google’s.

Among the less contentious terms is the licensing fee. Twitter wants about $30 million per year for its exhaustive real-time stream, a doubling of the previous fee.

But Microsoft (like Google) hasn’t yet agreed to Twitter’s other demands: More user interface control, a larger cut of ads sold next to its tweets and more linking back to Twitter, sources said. Microsoft would also like a longer term than Twitter is offering.

What’s particularly interesting about the deal is that if Microsoft can get it signed, Bing will have preferred access to social signals from both Twitter and Facebook, while Google will only have access to a more limited and indirect supply of publicly available data.

Bing has a long-standing search partnership with Facebook, and it’s made Facebook user data an increasingly prominent part of search.

But what’s unclear is how valuable and essential real-time search is to either Google or Bing. Outside of the major search engines, most real-time search outfits have pivoted or fallen off the map, with the exception of Topsy.

Real-time search “could be valuable, especially with a really good implementation, in terms of user experience and also revenue,” said one source. “But it has definitely not crossed that threshold for anyone yet.”

In response to a question about the importance of real-time, a Google spokesperson replied:

“We’ve temporarily disabled We’re exploring how to incorporate our recently launched Google+ project into this functionality going forward, so stay tuned. Our vision is to have include Google+ information along with other realtime data from a variety of sources.”

Twitter, meanwhile, noted that it still has fire hose deals with Yahoo, NTT Docomo and Yahoo Japan, as well as “dozens of other smaller developers.” That said, not all of them have had to pay.

[Dick Costolo Photo by Kim White/Bloomberg via Getty Images]

[Firehose Image courtesy Minnesota National Guard on Picasa]

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