Comments made by Microsoft (Nasdaq: MSFT) CEO Steve Ballmer yesterday have the blogosphere riled up with Twitter buyout speculation.
Ballmer was asked about the potential of a Twitter acquisition during the Search Marketing Expo West conference.
He began with the politically correct response. He alluded to its search partnership with Twitter, even if the same can be said on behalf of other Twitter search partners Google (Nasdaq: GOOG) and Yahoo! (Nasdaq: YHOO).
Then he let out this meaty morsel.
"Whether we need to own the company or not I think is far less clear," Ballmer said.
In other words, he's certainly leaving the door open for it to happen -- once things clear up.
Ballmer also emphasized that Twitter and Facebook want to be independent companies. I don't know about you, but I'm guessing that you can't tell that someone wants to be a swinging single until you hit on them first. Does Ballmer assume that Twitter isn't for sale because his company has inquired about swallowing it whole?
Buying Twitter now probably makes a lot more sense than buying it later, after it figures out how to monetize its traffic. Microsoft will certainly have to pay up the longer it waits if Twitter's popularity continues ascending.
Sure, it may pay to wait. Internet users are fickle, and social media sites come and go. United Online's (Nasdaq: UNTD) Classmates.com and News Corp.'s (NYSE: NWS) MySpace could have been what Facebook is today, but blew it along the way. As relevant as Twitter feels today, there's always the threat of a better mousetrap springing elsewhere.
The last thing that Microsoft needs is to overpay for a Web 2.0 phenom that's peaking. However, that may also be what kept Yahoo! from raising the ante when it seemingly could have acquired Facebook a few years ago. Life would have been materially different for Yahoo! if it had the sticky traffic magnet known as Facebook in its back pocket. Maybe it would have been Microsoft outsourcing its search through Yahoo! and not the other way around.
I don't think Twitter will ever be as valuable as Microsoft, but it's a property that Microsoft, Google, and Yahoo! -- and even AOL (NYSE: AOL) and IAC (Nasdaq: IACI) -- would love to own.
If it can happen, Ballmer, make it happen before everyone else hears the dinner bell.
Should Microsoft buy Twitter? Share your thoughts in the comments box below.
