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5 companies that should buy Twitter

5 companies that should buy Twitter Nanette Marcus

"Someone's buying Twitter!" started as the new "Stop the presses!" around the iMedia editorial department.

It has now morphed into the equivalent of "The Boy Who Cried Wolf" as the rumor flames are doused as quickly as they are sparked.

First, there were talks with Google, which were actually related to possible product and distribution partnerships, particularly around a deal to become the exclusive search partner of the microblogging phenomenon. 

Then there was a teaser from Twitter CEO Evan Williams that got the web -- excuse the pun -- all atwitter over a potential buyout. It turns out that the "very big day" for Twitter was Oprah's Twitter debut.

In light of the constant rumors swirling around Twitter, iMedia queried a handful of industry experts as to how some the biggest companies in our space could benefit from the purchase of the microblogging giant. Read on to find out what might happen if Microsoft, Facebook, Google, MySpace, or Yahoo decided to cough up the big bucks to do just that.

When presented with the chance to comment on the hypothetical acquisition of Twitter by someone, I jumped at the opportunity to envision Twitter as part of Microsoft. I do believe Biz Stone when he blogged, "Our goal is to build a profitable, independent company, and we're just getting started." But, I can also see a lot of value to Microsoft if it was at least on the Twitter "team" in some way. So, with that, here is my vision:

Here's why this could happen and what it would mean to Microsoft:

  • First, why not Google? Well, for one, Evan Williams left Google after selling Blogger to Google. A distant outsider's perspective says that maybe it didn't go so well. Furthermore, Twitter has hired some people from Google, such as Doug Bowman, former visual design lead at Google, and now the creative director at Twitter (formerly Biz Stone's role). I can't imagine Google likes that very much. Not to mention, Google, how are YouTube and Blogger going for you?

  • Microsoft already owns a piece of Facebook, and Twitter thought enough of Facebook to have a few conversations regarding a possible acquisition. It didn't go through for whatever reason, but it just seems natural that those two companies should work together.

  • Microsoft also has what appears to be a pretty solid ad deal with Digg, and, after all, where is one of the first places Twitter plans to focus on making money?

  • Microsoft is getting aggressive in mobile search by finally inking a deal with Verizon to be the mobile search provider for its devices. Twitter and mobile is the web equivalent of peas and carrots.

  • How easy would Twitter plug in to Live?

  • Twitter for business: This is an obvious play where Microsoft has a distinct advantage over everyone else. Talk about organizational knowledge retention with Twitter integrated into Sharepoint. Want to diagnose a problem with a project? Pull up the Twitter feed.

  • Atlas, aQuantive (now Microsoft Advertising), DrivePM -- a lot of things to rapidly plug in to Twitter should Twitter's creative powers approve.

I think there is only one way that this could work for Twitter's founders (who aren't in this for the money, I'd say), and for the consumer: Allow Twitter to operate independently to draw out the creativity yet to come, yet draw on the vast resources of Microsoft to craft powerful partnerships and agreements with a variety of entities. For Twitter to reach its potential, it must do so quickly as well as find a way to structure a wide variety of agreements. Small, independent boutiques want to develop for the platform, while large multinational corporations intend to leverage the data produced within the platform (with myriad companies in between). Both large and small media agencies will want to interact with Twitter to purchase ads. Each has its own special needs, which differ greatly from the publishers and news entities that may rely on Twitter for breaking news.

If there is one place where Microsoft knows how to make money by squeezing every last aspect of the ecosystem, it is in licensing and partnerships. Twitter would be served well by leveraging this ability.

The current users of the platform will have to get used to the money-making engine that surrounds their content. While the creative Twitter team will produce better features, it will have to make room for ads, data feeds, analytics, multi-device formatting, plug-ins, data streams, etc. Each piece of this will have dollar signs associated with it. At the end, however, it would have to maintain the integrity of its vision, sometimes doing battle with The Machine (Microsoft), to ensure that the consumer experience remains a positive one, and one that continues to attract the broad demographic that is currently hopping on board in greater and greater quantities each month.

I believe that the main obstacle to an acquisition is simply that there are so many courters with a land-grab mentality rather than true partners who embrace the vision. Twitter is entertaining the conversations, while at the same time trying to prove something to both itself and the speculating world, which is that it doesn't need any of them.

The fact is that something has to happen. Twitter has VCs who have invested in it, and VCs want their money returned in factors of 10. Twitter is a tough sell as an independent public entity even though there are so many ways that this company can make money. I believe an acquisition is probably its best bet for immortality.

If Microsoft were to get its hands on Twitter, it would be a very long-term investment in which Microsoft is uniquely positioned to realize a return. Fortunately, along with Google, its stock actually means something (compared to Facebook, whose valuations vary widely, thanks in part to Microsoft). So, with the vast majority in stock, I could see Microsoft handing over up to $2.5 billion to keep Google's hands off of Twitter, and to capitalize on a side of Twitter that few are capable of realizing. Granted, Microsoft can easily roll with a Plan B should the price get out of control, but I doubt it would fear the big numbers for a property like this (YouTube to Google for $1.65 billion -- all stock appears way overpriced in retrospect). I do believe, however, that this is too much for the kind of short-term results that Wall Street has come to expect, and Microsoft would be widely criticized for shelling out that kind of money -- but there is often value to winning.

Reid Carr is president of Red Door Interactive. You can follow him on Twitter at www.twitter.com/icowboy and www.twitter.com/reddoor.

Chances are Facebook is not going to buy Twitter. It has tried before, and it's rumored that Facebook will try again. It is understandable why it might, given Twitter's explosive growth, its target audience, and the platform's current poster-child status for social media. On the other hand, does it really make sense for one highly valuated but not profitable company to purchase another similar, if smaller one?

And, at any rate, what would stop Facebook -- with about 25 times the funding, and 20 times the user base -- from just mimicking the functionality and incorporating it with the rest of its suite of offerings? Nothing. That is exactly what Facebook's recent homepage update was intended to do -- introduce a more "stream of consciousness" approach to the social networking site. The fact of the matter is that Twitter looks good given the demographic traits of the user audience, their behaviors, and the additional functionality that might provide Facebook with additional features.

Let's face it -- even in the face of this epic recession, Twitter is looking pretty good. Currently, Twitter's growth is surging, with more than 600 percent growth in the last year alone. Six million users are sending 140-character tweets to friends, and the core user base is described as very dedicated. According to the Pew Research Center, these users are "young, mobile, and new-media savvy" -- the kinds of users who will be on the cutting edge of new media interactions as the web becomes increasingly mobile. Pew predicts that in another few years, tweeting will be adopted by a larger audience, in much the same way that SMS messaging has been used. So Twitter seems to be engaging the vanguard of mobile web users, and it makes sense that Facebook would want a piece of the action as its user demographic steadily ages.

But why not just build out the same functionality? Facebook's status message, accessible through its robust mobile client, can do almost the same thing. A key difference, however, is the privacy model, which is a basic aspect of either site's information design, and as such, very hard to change. Facebook users must ask permission to share information, whereas a Twitter follower, once they have a #username, can begin reading feeds without reciprocating. This means that users are not obligated to follow everyone who is following them, which in turn leads to popular users being able to broadcast information much more effectively through key thought leaders.

By purchasing Twitter, but not integrating the service more than it already is through Facebook Connect, Facebook would have access to a medium that is much more open. And as Twitter teeters at the tipping point, it could provide a medium that disseminates messaging -- such as targeted advertising --  much more quickly, while remaining effective.

Were Facebook to acquire Twitter, there are a number of interesting features that Facebook could leverage to create a more ubiquitous experience. For example, why not leverage Facebook Connect to allow users to Twitter from the pages they are on? The relative simplicity of a tweet -- versus the much more complex interface of Facebook -- would make it very easy for users to share information and opinions on site content. Or, on the other side, by enabling users to text to their Facebook status messages, ala Twitter, it would streamline the Facebook mobile experience. Another interesting hybrid feature would be to let users associate tweets with images, enabling users to caption their day-to-day findings quickly and easily.

At the end of the day, it's safe to say that any discussion regarding Facebook purchasing Twitter is conjecture, and it's unlikely that it will move past that. Bigger companies with real money, versus stock, will pony up at the table, and the Twitter leadership team will recognize this. But Twitter would provide value to Facebook through access to emerging technologies, a simplified interface, an open privacy model, and the possibility of new user interactions and features.

Evan Gerber is a principal user experience consultant at Molecular. You can follow him on Twitter at www.twitter.com/evangerber.

Google should hypothetically purchase Twitter for a variety of reasons. Google is so yesterday. The world is transitioning to the "real-time web" and giving rise to the status update. While what appears as minutia in the form of a tweet is actually quite valuable if the data is mined and presented properly in real-time.

Twitter is actually an ecosystem that allows hyper connectivity and real-time immediacy. Users discover news, get recommendations, and talk about brands, teams and business, while finding information about what their network thinks on virtually any topic. Twitter knows more about what I am interested in than any website. Google could parse that data and make my web experience much more customized and actually use this knowledge to tell me (via advertisements) about things that I did not know I wanted to know about, but that are actually valuable.

Google could rank websites based on an algorithm of the number of people that have tweeted and linked to a particular website. If "influentials" actually tweet a link, it could make Google's results even more enhanced with "commentary" around website content and what people say about it. It could also look at tweeted links to break trending news stories, articles, blog posts, images, etc., around a search result.

Google could layer conversations on top of maps to show what people are saying about any location. (Paris is wonderful this time of year.)

Google could immediately display what my social graph is saying about any topic, brand, or business that I search for on Google. Twitter really lends itself to location-based awareness, and this could translate into hyper-local ad serving.

Users of a Twitter-enhanced Google would benefit from immediate, real-time data across a multitude of services. Imagine if you could see the five latest relevant tweets from your social graph that sent you an email to your Gmail account based on the content of the email.

The main obstacle standing in the way of an acquisition is the founder's vision of what Twitter will or could become. Twitter has ample VC funds to give it quite some time to figure out the business model. I believe that the Twitter founders think that selling now would "feel" like a failure, although it would be a financial success.

At this point, Google would most likely have to pay Twitter somewhere close to a billion dollars. While Twitter does not have a proven revenue model, it has a proven form of communication that the world is quickly adopting -- with 7 million users that are not going away. Twitter is creating value by building off of Metcalfe's law and creating a network of hyper connections and real-time content. So, what is the value of that data? Should Twitter and Google get married? I think they should at least consider dating.

Rodney Rumford is founder of Gravitational Media and author of the book: "Twitter as a Business Tool." You can follow him on Twitter at www.twitter.com/rumford.

What happened to MySpace? We used to love MySpace. But we got bored because it was too cluttered and the shine wore off. Facebook became our new favorite, and now we say the words MySpace with the same "what happened to them?" tone that used to apply to Friendster.

MySpace still has one thing going for it: music. More than 5 million musicians have a MySpace page. If you are a band, you host the majority of your content on MySpace. You have your van to haul your gear, your T-shirts to sell at shows, your manager to handle your business, your agent to book your tour, and your MySpace page to display your music, videos, tour dates, and talk to your fans.

MySpace knows its last foothold is in music. That's why it hired MTV's digital guru Courtney Holt to run the division. That's why it gave all the record labels a piece of the pie. MySpace hopes to be the destination for you to get your music. Because music is free. The music industry may not accept that yet, but every kid in America knows that music is free, and MySpace has free music.

Music is the soundtrack to our lives, right? What are you doing right now? What is the song playing in the background or in your head? That's the status you want to convey. Imagine using 140 characters to not only say what you're doing but to relay what song is playing while you do it.

If anyone should have Twitter, it should be MySpace. In a MySpace/Twitter world, you can now embed a song in your tweet. The user can choose to listen or not. And if they love what they hear, the song title links back to that song on MySpace Music.

The_Real_Shaq: I'm n baton rouge with feed the children, lotta happy families. Listening to Lil Wayne's "Hot Revolver."

Lardog2000: In Burbank airport on way to Portland. Hard to keep track of 1 year old that just learned to walk. Go B go! Bowie's "Heroes" on the brain

Wouldn't all tweets be so much sweeter with a song? Wouldn't everyone like to accent their status with a tune? We'd not only know what you are doing, but what you are feeling, too!

MySpace's traffic would go through the roof. Millions of people would go to the MySpace music page you pointed to and listen to that song.

Music would be cool again. We'd all be listening to music. MySpace would single-handedly save the music business because people would be listening to so much music. Sure, there are renegades out there doing this now like Blip.fm, but they are linking to music mined from who-knows-where on the web. Only MySpace has deals in place that can make your Twitter tunes legit.

And what a boon to MySpace's revenue. Because of the heightened traffic, advertisers would be falling over themselves to serve up ads on MySpace, or strike a deal to personify their brand with music. What about the data -- the data that MySpace can now add to its arsenal for targeted advertising?

So what price should MySpace pay for Twitter? A year ago, $1 billion would have sounded good. That's almost double what News Corp. paid for MySpace. But competition is fierce. Google and Microsoft will battle it out for Twitter's search capabilities. Facebook will want Twitter just to stop a competitor from getting in its way. But MySpace just plain needs Twitter to survive, to stop the decline, and put it back in the limelight.

TomMySpace: We just bought Twitter. How awesome is that? We're "Dancing in the Streets!"

Larry Weintraub is CEO and co-founder of Fanscape. You can follow him on Twitter at www.twitter.com/lardog2000.

Buying Twitter could enhance Yahoo's key initiatives and further punctuate its market differentiation, plus beef up its search offerings to make it more competitive with rivals AOL, MSN, and Google. For Yahoo, owning Twitter could provide more heft to an already hefty proposition with real-time, mobile search and the integration of Twitter with its other services, applications, features, and content.

At the cornerstone of Yahoo's key initiatives is Yahoo Mobile web, a customizable mobile portal that acts as a homepage. This recently announced launch potentially strengthens its position in wireless internet and mobile apps, one of the fastest-growing sectors in the industry, and underscores its focus in third-party mobile application development and mobile search. Yahoo's mobile strategy provides a clear opportunity to better leverage the applications, platforms, and properties -- including social media features -- it has purchased over the last few years, as well as newly launched or developing services.

Integrating Twitter would provide a more personal and portable search experience and could potentially drive more revenue, boosting its developing competitive position and revenue models. Furthermore, if its strategy to weave social features throughout its content to more effectively monetize social features and applications proves out, owning Twitter may enable it to capture more profits than if it just partnered to drive revenue.

But Yahoo has a history of buying and then failing to integrate otherwise great social media tools -- cases in point: Flickr, Delicious, Jumpcut. In January 2008, Yahoo was testing the integration of Delicious user-generated bookmarks into Yahoo search results pages, but that appears to have disappeared. Integrating word-of-mouth references into search results and potentially applying a database of human-tagged pages may advance the relevancy of search, particularly on mobile. There are some challenges here, as well. Tagging must be seamless and a critical mass of tagged pages must exist for it to really be effective. Perhaps its mobile strategy will help elevate this effort again, giving heft to Twitter or real-time search.

If its mobile strategy is key to fueling an effective Twitter integration, Yahoo still has structural distribution challenges to overcome, as it has no direct ties to cell phone operating systems. However, it does have well-designed mobile software applications.

The potential acquisition costs present a challenge, too -- $1 billion may be too rich for Yahoo's pocketbook, and the direct benefits of acquisition need to be clearly articulated and justified. It can't afford to pay to be "cool."

To get an idea of how Twitter may be integrated into Yahoo, look at its Mobile services and OneSearch product descriptions. The company hopes the strategy will help link its disparate properties, bringing more advertising dollars and growth. Even without the acquisition of Twitter, Yahoo could very well evolve to look more like Facebook, a personally customized homepage integrating selected content, features, and applications.

For customers, the integration of Twitter into Yahoo, specifically its mobile portal, would mean simple, customized, and portable access to information, content, applications, search, and more. For advertisers, it could mean more ways to connect effectively across channels in ways that are more relevant, timely, and connected to consumer behavior that accounts for but does not compete with social media behavior.

"Should" Yahoo buy Twitter? Probably not. While it would lend some heft to existing initiatives while potentially boosting its overall developing strategy, the investment may not ultimately pay out. It also may not be essential to deliver on its market promise. And while Twitter may be a current phenomenon, it is most likely the first and not the only of its "kind." There are certainly more to come.

Denise Zimmerman is president and CSO at NetPlus Marketing Inc. You can follow her on Twitter at www.twitter.com/dzimmerman. 

Nanette is iMedia Communications' executive editor.   In addition to her roles at iMedia, Nanette has served as a specialist in content marketing, editorial content, public relations and social media for various clients. She's contributed to...

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to leave comments.

Commenter: armanart t

2009, April 28


Commenter: Matt Hulett

2009, April 23

Great post. I would add Amazon to your list. Some of my reasons why are posted here: http://www.startupwhisperer.com/2009/03/should-amazon-buy-twitter.html

Commenter: Reid Carr

2009, April 23

Larry, I think I just was persuaded toward News Corp buying Twitter. Love the music connection; hadn't thought of that. Perhaps the same theory holds for eBay (click from a tweet to bid on a related item...) and they can use the funds from the Skype deal to throw their hat in the ring!