

Google Offered To Buy Twitter For $2.5-$4 Billion - vyrotek
http://finance.yahoo.com/news/Google-Offered-To-Buy-Twitter-siliconalley-2283206007.html

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frb
Is Twitter actually making any money?

I find these billion dollar valuations pretty crazy if the company in question
is not actually making any money.

Sure, Microsoft and Google have their strategies and would spare no pains
(money) to score each other off, but this overvaluation of companies is just
not healthy for the tech industry. It just feeds the next big bubble.

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malloreon
During a conversation I had last week a colleague who's dealt with Twitter
told me that they make $100M-$200M each year licensing the firehose.

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axod
How many customers do they have though.

If they're 'licensing' the firehose to Google and MS, that's pretty unreliable
income.

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malloreon
Publicly their firehose customers include Google, MS, and ~10-12 startups
whose names I don't know.

Soon they'll begin seeing revenue from the new half/10% hose plans announced
last week.

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brown9-2
_Both sources speculate that Microsoft may have made an offer too. This makes
sense to us. One reason Google would buy Twitter is to keep it out of
Microsoft's hands.The logic goes the other way, too._

This M&A/portfolio game seems so silly. The companies bought up by the
goliaths to use against each other seem to rarely have a successful life post-
acquisition.

~~~
jdp23
Microsoft in particular has a horrible record with acquisitions work.

There are exceptions of course. Hotmail worked out well, and back in 1999 they
bought my startup for $60M, and it worked out great. But eight years later,
when I left, we were still being used as the rare example of when it actually
worked out. Almost all the other much bigger deals since then had foundered
badly, killed by politics or the NIH syndrome or management incompetence.

Google's had some successes, most obviously YouTube, and they're probably a
better cultural match for Twitter. I can see why Twitter turned down the $2.5B
but it seems like a fair offer.

~~~
riffraff
Why is google a better match for twitter than microsoft? Google appears to
have tried to "become social" a few more times than redmond and failed
regularly.

~~~
jdp23
from the outside, Twitter seems to have more of the Valley-style engineering
culture, and shares Google's API-oriented philosophy. Also there are some
former Googlers in key roles there.

It's a good point about Google not getting social. Then again, Microsoft's
also tried and failed to go social multiple times -- Windows Live Spaces, QnA,
Groove, Hailstorm, and 3° are a few fairly-high-profile examples that leap to
mind.

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brianobush
Is twitter really that unique? I know mindshare wise, it has front-of-the-bus
valuation, but the technology behind it is quite simple (and should be written
up as a RFC).

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InclinedPlane
The technology behind twitter is trivial in the abstract. At scale it's
decidedly non-trivial. See also: paypal.

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brianobush
Google has solved many of the hard problems that would render twitter a
trivial. I am not declaring a 150 line python script would duplicate it, but
that Google could easily build a similar service. Now mindshare is a different
story.

~~~
InclinedPlane
Yes, but no. Google's systems are tuned to google's apps, twitter is similar
but also different in some fundamental ways. The complexity of rendering every
individual twitter feed is pretty significant compared to, say, gmail, and the
same optimizations do not always make sense. Moreover, the complexity of the
SMS back-end should not be dismissed. While google certainly has the chops to
handle all of these problems, including SMS, it's still a bit much to say that
google engineers could reinvent twitter better and faster with little effort.

The biggest piece of evidence that this is the case is the simple fact that
they haven't yet. Despite trying (see: buzz).

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aresant
I never thought I'd say it but Google paying up to $4 or 5b for Twitter kind
of makes sense.

Google badly wants a "social media" win.

Twitter, for better or for worse, is the cheapest household brand name of
social media.

I've personally found much value from searching archived Tweets via twitter &
google which suggests that Google could monetize that asset, as they've done
with YouTube, and turn this into a huge win since selling ads is such a core
competency.

On the other hand, Google's biggest aquisition win - YouTube - they got for a
relative "steal" at ~$1.65b in an ALL stock transaction, which you know isn't
going to happen with Twitter.

<http://mashable.com/2010/07/09/google-social-media-attempts/> \- Google's
history of social media attempts

~~~
lawfulfalafel
I think twitter would fit with google because they can leap any privacy
concerns. After the buzz fiasco and the reaction to the facebook privacy
changes a public social network like twitter might be more valuable than it
seems.

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rabble
I remember back in the day, 3 or 4 years ago now, when Yahoo tried to buy
Twitter for $25 million, and twitter demanded $100 million. They couldn't come
to an agreement, and the deal fell through. Funny how the longer they wait,
the more pricey Twitter becomes.

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lrm242
Why is that funny? By definition, as a good business grows it will be worth
more. It's not like Twitter has been standing still for 3 years.

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mkramlich
totally not surprised. Twitter seemed like a great fit for Google.

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borism
I think Twitter would be very bad fit for any tech company, but it would also
be very surprising to me if they can achieve valuation of anything above $5bn
post-IPO...

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axod
Agree. I think it's more likely someone like newscorp would buy it.

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ohashi
Don't even joke about that :( FoxTwitter _cringe_

