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Does Google Need Twitter?

By Rick Munarriz – Updated Apr 6, 2017 at 2:31AM

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Rivals can't let Google take all or part of Twitter.

When I wrote that Google (NASDAQ:GOOG) would buy Twitter in March -- giving it three weeks to nail the nuptials -- I was really just leaning on history as my guide.

Microsoft (NASDAQ:MSFT) acquired a stake in Facebook just three weeks after dismissing the niche as "faddish." When Google's CEO referred to Twitter as a poor man's email system -- rather than a rich man's buyout target -- I started the clock.

Well, I may have been fashionably early, but the joke isn't funny anymore.

TechCrunch reports that three different unnamed sources claim that Google and Twitter are indeed negotiating a buyout. That wouldn't be a surprise, since Twitter's founders also sold Blogger.com to Google. Wouldn't it be cheaper for Google to just hire Evan Williams and Biz Stone, sparing itself future buyouts? It let Williams get away five years ago. Big mistake!

This may not be a buyout at all, though. The two companies may simply wind up brokering a paid-search deal, now that Twitter is serious about beefing up its search functionality.

If you're Microsoft, you can't afford to let Google get away with either a search deal or a full-on purchase. Even rivals that aren't typically as catty, like Yahoo! (NASDAQ:YHOO), IAC's (NASDAQ:IACI) Ask.com, and Time Warner's (NYSE:TWX) AOL can't let Google nab the traffic magnet that Twitter has become.

Facebook is looking for a chief financial officer "with public company experience," so it's likely going the IPO route later this year. That leaves Twitter as the best Web 2.0 company potentially available, after News Corp. (NYSE:NWS) snapped up MySpace a couple of years ago.

It doesn't matter whether Google wants all of Twitter, or just dibs on its search engine. Big Goo must be stopped, especially now that my fake countdown clock is starting to feel all too real.  

More stories to brush up for the feeding frenzy:

Microsoft is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers selection. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz embraces disruptions and lives for opportunities. He does not own shares in any of the stocks in this story. He's easy to find on Twitter as @market. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's on Twitter at @TheMotleyFool. The Fool has a disclosure policy.

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