Search engine giant Google is said to be in advanced talks to buy micro blogging phenomenon Twitter according to several sources closed to the negotiations.
Claims to this seemingly incredible announcement appeared on tech news website Techcrunch late last night when Michael Arrington said Twitter's valuation is expected to be "well north" of $250 million.
A few month ago, Facebook offered $500 million for the popular online web service, although it was an all-share transaction offer that Twitter, at that time, considered to be widely off target.
Google will likely to offer cash and/or stock in any acquisition which, in the eyes of many investors, is as good (if not better) than cash. The Twitter/Google rumour also raises questions about the reasons why Google would even consider a Twitter acquisition.
Twitter co-founders know Google as they have sold Blogger, a traditional blogging service, to the company five years ago for a hefty sum. Twitter will need more resources as it grows and ways to monetise its ever growing user base and interaction.
And Google has shown in the past that it is fairly liberal when it comes to killing its own products to ensure the survival of any acquisitions. After all, it did kill Google Video overnight to make sure that Youtube thrived.
More on this later today. You can follow ITProPortal.com on Twitter @ http://www.twitter.com/itproportal.
Google and Twitter are a match made in heaven. That's on paper. In reality, like for Youtube, Google might have some trouble trying to monetise the traffic. Twitter traffic is still smaller compared to what Youtube was at the time when Google acquired it. Blogger's sale 5 years ago occurred when the tech market was still booming. Twitter's acquisition on the other hand is set to occur during one of the most dreadful economic periods of the last fifty years. Does Google has the upper hand in this one?
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