Twitter's management turned down a $500 million buy-out offer from Facebook late last year, which was an interesting move for a company that made zero revenue at the time. And now the rumors are heating up that Google is in talks with the company and a possible buy-out is on the table.
This may actually have been what Twitter was hoping for—after all, in the ensuing months it's increased its user numbers significantly, been featured as an example vehicle for citizen journalism after the Hudson river plane accident, and has begun moves to monetize its business. All of these events will undoubtedly have increased its value, and Google has more cash than Facebook does.
And if you're wondering why Google may be interested in such a seemingly esoteric little company with a purpose that's not even fully-fleshed out yet (most people's response when learning about Twitter is "why do you want to do that?") then think about this: Twitter's millions of users provide a live, crowd-sourced and global text, news, opinion, photos, and video data feed. And Google, beneath its new layers of business, is all about its search engine. Gaining inside access to Twitter would give Google access to a much more "real-time" data stream for its search bots to get their teeth into, and that could be a valuable asset indeed. Even this week there were rumors that Twitter itself had been finalizing its own dynamic internal search feature, after a series of trials and refinements.
As Techcrunch notes, there's already a precedent for a Google and Twitter tie-up: the two founders Evan Williams and Biz Stone have already sold one successful net startup to Google before—Blogger, about five years ago. It's completely believable that Williams and Stone would be open to doing the same thing again.
Remember the rumor status of this news, though—the talks may be very new, or the Google interaction may be just to integrate Google's powerful search expertise into Twitter. We're inclined to believe its not the latter, however. It would appear to be excellent timing for Google to try this: if Twitter successfully earns revenue it'll be more expensive, and there'll be much more attention in a buy-out from Google's search-engine competitors.
Update: Kara from AllThingsD has written a piece to firmly squash this rumor. She points to information from an insider "close to" Twitter who mentions it's merely concerning"real-time search and product stuff"-related talks with Google a few weeks ago. And she highlights that during an appearance this week on The Colbert Report, Biz Stone was explicit in stating his company would be "strong, profitable, independent," with the emphasis on the independence part.
This new information may, or may not, bear some relation to further news concerning a collaboration between Google and Twitter for advertising purposes. It's been confirmed that Google will "package" Tweets into an AdSense campaign—sounds like a potentially neat income earner for Google, though there's no information on direct involvement from Twitter.
In an attempt to clear all this up, we tried to get some facts about the matter from Google directly. All the company would say is the classic "We don't comment on rumor or speculation," which neither confirms or denies anything.
One thing, however, is clear from all this to-ing and fro-ing: Twitter is an extremely intriguing entity that's sparking off all sorts of speculation. It seems its rather unusual approach to running itself as a "conventional" business hasn't hurt its potential for success at all. Instead it's actually brought the company directly into public focus.