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Summary:

Google may buy Twitter, or it may not, but one way or another, Twitter is hot. Politicians, TV anchors, actors, athletes, bloggers…everyone is tweeting. But there is more to Twitter than just hotness. It embodies three macro trends taking place on the web right now — in just 140 characters a tweet.

kingkong1.jpgAfter a long day of meetings and many sleepless days this week, I decided to go to sleep early last night. I guess I missed the late-breaking rumor that Google may be buying hot micro-blogging/messaging service Twitter for ungodly sums of money. When I read the headline this morning, the first image that popped into my head was this scene from “King Kong,” with Twitter as Naomi Watts.

A few clicks later, when at Kara Swisher’s blog, I learned that no, Google is not buying Twitter, as originally reported by TechCrunch. The two companies are apparently involved in product discussions. True or not, however, I get the feeling this acquisition rumor is going to dominate the conversation.

At present, Twitter is having a media honeymoon. Not a weekend passes when The New York Times doesn’t devote a considerable part of its expensive newsprint to Twitter. Jon Stewart jokes about it. Even Playboy models have Twitter accounts! In today’s dismal economic climate, thanks to its simplicity and its chameleon-like ability to be “many things to many people,” Twitter in many ways has come to represent the zeitgeist. No wonder some hip-hop moguls want to invest in the company.

A few weeks ago, I told Jemima Kiss of The Guardian that Twitter was like a megaphone for everyone on the planet. And that’s what makes it so powerful. Yesterday, I had the same conversation with German Radio reporter Marcus Schuler, who’s in town attending the Web 2.0 Expo. I tried to explain that Twitter is the most visible manifestation of three major trends on the web that should be viewed together:

  1. The web is transitioning from mere interactivity to a more dynamic, real-time web where read-write functions are heading towards balanced synchronicity. The real-time web, as I have argued in the past, is the next logical step in the Internet’s evolution. (read)
  2. The complete disaggregation of the web in parallel with the slow decline of the destination web. (read)
  3. More and more people are publishing more and more “social objects” and sharing them online. That data deluge is creating a new kind of search opportunity. (read)

Twitter essentially embodies those macro trends but hides them behind the elegant simplicity of 140 characters. Twitter, in fact, is not just a company — instead it has become a verb — and in the process, actually represents a certain way of doing things. That’s why I’ve maintained that Twitter shouldn’t really sell…at least not now!

As it turns out, even Twitter management is thinking about going long on their company. Last night Twitter co-founder Biz Stone told Stephen Colbert that they’re in it for the long haul and want to turn fast-growing Twitter into a big company. Remember, they turned down Facebook, which wanted to buy them for $500 million. They can hold out for more — especially if Google does get desperate. When will that be? When Larry and Sergey start tweeting. Of course, in the interim, you can follow me on Twitter.

Updated: Twitter co-founder Biz Stone writes on the Twitter blog:

My inbox is flooded this morning with requests for a response to the latest Internet speculation about where Twitter is headed. It should come as no surprise that Twitter engages in discussions with other companies regularly and on a variety of subjects. Our goal is to build a profitable, independent company and we’re just getting started.

(Photo courtesy of Universal Pictures via Apple.com)

  1. This rumor was too good to be true especially after the “Twitter is a poor man’s email” comment from Schmidt recently. Well after this rumor surfaced, I wondered for a moment if that was a deliberate attempt to gain an advantage in any potential upcoming M&A negotiation. A kind of a saber-rattle before the offer. But I guess not.

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    1. Deepak

      It could be anything to be honest – it is not clear what kind of deal is going to emerge. But as some of the folks say below, just because Google buys a company doesn’t mean the deal is going to work out. If you looked at their past history, it is full of blown mergers.

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  2. Oh, my G-d Om, you missed a rumor overnight, how we will ever live!

    Buy sell or hold, something the Twitter team did, quite apart from tech, is that the little co is getting big mention in the mainstream media, and more than that, they are being integrated into the the operations of MSM and other things.

    Sell? No way. A sure death if Google bought them, buried. How many Web 2.0 biz became verbs? Google, Twitter, ….?

    Quite a coup.

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    1. Amen to the sure death part — how many projects have they destroyed.

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  3. I’d be surprised that Google would buy Twitter because they just bought Jaiku, a Twitter competitor.

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    1. and what did they do with Jaiku :-)

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  4. There were rumors that Facebook offered twitter 500 million monopoly money dollars….

    It’s all about the datamining, big brother, and the police state.

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  5. this social networking bubble …when it will burst ?

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  6. seems like google just want to buy the internet

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    1. and then put adsense on it leon :-) not such a bad idea. but can they make it work – their history of making things grow and work is pretty bad. I don’t believe Google can actually do anything more than search and adsense.

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      1. Bingo Om…bingo…

        I actually think that google’s descent as a rapid growth company to one more staid (like microsoft) is nearer than most people think..

        This is how it is…the microsoft of the late 90s and early decade is now rapidly looking like microsoft…

        google should continue its core competency and Eric should keep appearing on tv shows selling renewable energy…

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  7. google want’s all…

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  8. Nice job analyzing Twitter growth and M&A opportunities, even if they are based on innuendo.

    Regardless of if they “stay or go,” I think the trends you cite are very interesting and will continue to lay the foundation for new companies and innovations leveraging the social, real-time Web.

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  9. Om,

    I believe that for Google size buyers business model is not the factor to decide whom to acquire. I guess they are buying out the hottest services for the shake of showing off instead of a making a viable investment as Twitter’s business model is non existent and i doubt they will ever make money. So, we can basically categorize buyers that do make investments for the shake of showing off who the king of the market is and those who buy services because they see a potential and a viable business model.

    On the other hand, maintaining Twitter requires much lower operational leverage than Youtube needs so if you see it on the very long term they can use the service for bringing new products into the market fairly too fast and inexpensive.

    My 2 cents bet however go on the showing off side :)

    Elias

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    1. Elias

      It would be one expensive way to show off. I think my analysis points why Google might actually want and use Twitter.

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  10. These guys would be fools not to sell Twitter. I know the founders are already rich but this type of early exit is almost always a good thing. The next stage for Twitter is going to be brutal. Its a very short lived life cycle IMO – you get bored of tweeting very quick and people are notoriously fickle with these types of web trends.

    Do it for your employees guys – chances are that you’ll never make Twitter into a multi product multi billion dollar venture on your own. There is nothing defensible aside from your first to market and your brand. Those are not a strong enough foundation to build a viable long term biz. I dislike FB for many reasons but the Twitter model is going to get squashed by FB when they launch a similar service. FB has become the defacto home page for an entire generation.

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