On paper, it makes perfect sense for Google to buy Twitter.
Google has failed at “social”. So, Twitter would fix that problem for Google.
Traditional display advertising is shrinking, getting eaten by “native” ad formats like what we see in Twitter and Facebook. So, Google would get that business.
Then, there’s Twitter, which is struggling as an independent public company.
The stock is trading around $US29, down 33% over the past year. Its IPO pricing was $US26. So, it’s getting increasingly cheaper to buy, and its investors are getting antsy.
One reason the stock is tanking is that the company has bungled its CEO transition. Dick Costolo stepped down, and Jack Dorsey was named interim CEO. Dorsey would be a fine CEO, but he’s also CEO of Square, a company that’s about to go public. Twitter needs a full-time CEO.
While Twitter sorts through the CEO question, morale at the company is suffering in certain areas, leading to some people leaving the company.
Google has $US70 billion in cash. Twitter has an enterprise value of ~$US17 billion. Google can afford Twitter even at double the price.
As a part of Google, Twitter would be able to experiment without the pressure of a quarterly earnings report. It could find its way, similar to how YouTube has evolved as a part of Google.
Thus, people continue to whisper that Google should buy Twitter.
But, Google is unlikely to buy Twitter for one simple reason: “Larry Page doesn’t give a f–k about Twitter,” according to Amir Efrati, a reporter at tech site The Information. Efrati is arguably the best tech reporter in the world, and he’s plugged into Google. So he would know.
If Google CEO and founder Larry Page doesn’t care about Google, it’s going to be hard to motivate Google’s M&A team to buy Twitter.
“Google will probably buy Twitter.”Google’s recent 10-Q would seem to make it less likely. Also Larry doesn’t give a f–k about Twtr.
— Amir Efrati (@amir) August 5, 2015
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