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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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  11. Recently Read on Alley Insider “it looks like there is no deal in the works. But of course the companies are talking to each other.”
    Yes The king kong Google fall in love with this sweet bird but i think they gonna fall :) And recent progress on Twitter tells me that some great things are coming towards Twitter so No Deal So Far. Try to make it worthy of $1000 Million.

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  12. i think twitter is an early view of where the web is going. if i was at google, i would buy gnip for now. twitter has gone critical, they can only mess it up. gnip for ‘social’ apps (and its hard to think of apps that won’t be social) is a nobrainer.

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    1. i think rohit you got it right …. i think this is where the web is going and i am pretty sure google will have some sort of an answer to this development. the IQ inside the company is too high for them not to see it. I think TWitter/Whatever as an acquisition target be one part of their approach – whether they can get it right is a whole different stor.

      My belief is that ultimately Google will “invent” this stuff but at the same time will be challenged by lack of mainstream adoption.

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      1. Well MS never had a successful organic web venture, and Google is behaving more and more like MS every day.

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  13. Question: What is the best way to grow your business without spending money on advertising? Answer: Free media coverage! How did Google get so big? How many times did you hear about Googling something on the news and in television shows versus how many times you heard Yahoo! it in those same sources?

    Why was MySpace huge? Same reason. Now it is Facebook and Twitter. Those who own the media can increase growth and drive up stock prices. Even those who don’t can be smart enough to figure out how to get free publicity.

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  14. this is a better deal for CNN or NY Times as the acquirer.

    @subwaystory

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  15. Om

    In this age of social web, adoption is invention. A billion swallows will float many fail whales.

    rohit

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  16. Dekonstruct Friday, April 3, 2009

    Twitter becoming a verb, that’s a good catch. I remember when a startup search engine became a verb and then basically ruled the world. What was their name again? Goggle?

    I guess if anyone on this social media ‘spherehicky is going to make it big, it would be twitter… and no one really knows why.

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  17. I liked your three-part analysis:
    1)the disaggregation of the web
    2)the publishing of more social objects (and the need to direct people to them)
    3)the drift/shift toward real time.
    Twitter does combine them, and that is Twitter’s value proposition. I think a major media company would be a better buyer than Google, MSFT, or any of the usual suspects. That’s because Twitter is about publishing and communicating, not about its underlying technology, which consists mostly of apps developed on its little platform.

    I wouldn’t sell Twitter into this market, and I disagree with your reader who says we will get over it. That person doesn’t remember email.

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  18. I know twitter search has cut my Google searches in half. It is just more interesting to see what people are thinking about things like the Jay Cutler trade and the Blackberry Appworld store, and ofcourse the obsession with everything iPhone. It’s also comforting to know that I’m not the only one addicted to Cadbury Mini eggs.

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  19. Hi Om,

    Not sure about in the US, but in Asia and I think in UK as well, SMS recipient does not get charged for receiving SMS.
    I believe there are hugh SMS termination costs to deliver twitter SMS in these regions.

    I am just curious and anxiously to see what is twitter’s strategy to become profitable.

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  20. Twitter is a new version of online chat. In fact I predict that it morphs into nothing more than a Chat room and sexual hookup service filled with corporate Spam.
    Its really cool to have something that shows what people are talking about (um not really) until that becomes just a noisy room and you cant hear yourself think. Like Blogs were a few years ago (when everyone had to have a blog) Twitter will find its place in the corner of the web where a few loyal followers and tweeters hang. A great service and a super name but a long term, defensible business? No…

    Will someone please tell me how and why Twitter will maintain its user base? Seriously after a few weeks it becomes more of an annoyance than a killer app. that I need. If you follow the right people in the right situation it becomes more of a news service and News is really only good for a few minutes a day for most people.

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  21. Personally, I would love it if Google buys Twitter, because I believe they will integrate Adsense with it, and then twitterers can make some money. Also, the service will be u more and fewer service outage

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  22. Google may not buy Twitter at this point of time but surely it has put a mechanism in place thru Google Ventures to map any new idea which might see the light of the day. Henceforth, no idea or a budding venture will miss Google’s radar.
    And eventually Twitter may as well fall back on Google’s lap as at the moment it’s bereft of any revenue generating model or idea. Twitter’s growth has been phenomenal but it has not been able to generate or put in place any revenue generating model.

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  23. Melvin Durable Sunday, April 5, 2009

    Don’t know what will happen with those two. But there are some synergy effects to be reached for both of them.

    Melvin Durable
    melvindurable@gmail.com

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  24. they gonna buy it, ruin it in a year and then discontinue it :P

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  25. Reading this made me realize why Om Malik is THE Om Malik! “”Twitter was like a megaphone for everyone on the planet””. I don’t think anybody could elucidate Twitter impact more succinctly. Really it has come as a mind-opener!

    I feel emancipated to be one of your many followers!

    Manish Pahuja

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  26. because messages are too short and it works on real time but the real one cause it iis very easy to analize quickly short sentences

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