Rumours of a possible acquisition from last month have subsided, but Twitter remains in serious need of a buyer and only one option would keep the social media company’s mission alive – Google.
In September, Twitter’s share price saw a dramatic rise as speculation mounted that a number of companies were looking at buying the firm, including Disney, Salesforce, Apple, and yes, Alphabet/Google.
While each of these companies did likely consider acquiring the 140-character company, each ruled themselves out of the running in early October – resulting in 20% being wiped off the company’s value in just 24 hours as reality bit.
Twitter is now ten years old, but is still not even close to turning a profit – the company has lost $2 billion since 2011. Analysts at CMC Markets have started to become concerned these profits will never come – the share price has been on a long decline from a high of $69 in December 2013 to below $20 today.
Twitter has tried various partnerships and sponsored Tweets to generate revenue, but it is becoming apparent that without major changes to the service, those revenues will never put the firm into the black.
Something needs to change, but maybe that something should not be trying to find profitability and instead finding a buyer that values the data more than money. There’s only one company that could find such value in Twitter’s social data, and that is Google.
The search giant could use the data to make its search results even more personal, and add more depth to social popularity as a ranking factor in its results both on search, but also Google News.
The data is valuable, but Google also fits as a buyer for another reason – their previous lack of ability to “do” social. Google has to date failed at its various attempts to make a social network that people actually want to use, and in Twitter they could buy one off-the-shelf.
Google bought YouTube and gave it the resources it needed to dominate the video streaming world before looking into monetisation in any serious way, and that is what Twitter needs – a trusting parent that will help it grow. And if Google gets sole access to Twitter’s deep hive of real-time data, then that is already valuable.
Photograph by Lobo Studio Hamburg