Breaking News - Google to Acquire Twitter

Website:	twitter.com
Location:	San Francisco, California, United States
Founded:	March 21, 2006
Funding:	$55M

Twitter, founded by Jack Dorsey, Biz Stone, and Evan Williams in March 2006…

Here’s a heck of a rumor that as per breaking news and sources from two separate people close to the negotiations: Google is in late stage negotiations to acquire Twitter. We don’t know the price but can assume its well, well north of the $250 million valuation that they saw in their recent funding.

Twitter turned down an offer to be bought by Facebook just a few months ago for half a billion dollars, although that was based partially on overvalued Facebook stock. Google would be paying in cash and/or publicly valued stock, which is equivalent to cash. So whatever the final acquisition value might be, it can’t be compared apples-to-apples with the Facebook deal.

Why would Google want Twitter? We’ve been arguing for some time that Twitter’s real value is in search. It holds the keys to the best real time database and search engine on the Internet, and Google doesn’t even have a horse in the game.

If this is accurate, it’s a brilliant deal for Google - the value of Twitter is only going to go up over time. And it will be Twitter founders Evan Williams and Biz Stone’s second sale to Google - they sold Blogger to them just five years ago. But there’s one big question - where’s Microsoft in all this? Letting Twitter go to Google only hurts them, badly, in the long term search game. This is an asset they need to be competing for aggressively.

Of course, it’ll be sad to see Twitter become just another subsidiary of Google, if this happens. I would have liked to have seen the company spread its wings a little longer to see what it could do.

Updated: Yet another source says the acquisition discussions are still fairly early stage, and the two companies are also considering working together on a Google real time search engine. But discussions between the companies are confirmed.

Update 2 (4/3/09): In a non-denial blog post entitled “Sometimes We Talk” Twitter co-Founder Biz Stone says: “It should come as no surprise that Twitter engages in discussions with other companies regularly and on a variety of subjects.”