Recently I read a tweet from Wall Street Journal that Twitter is looking for a buyer, with a valuation of about $ 8 billion. That is a lot of money, but then Twitter is a big deal. A lot is written about the utter dominance of Facebook in the social networking sphere, while saying this we over-look how Twitter has grown continuously and become a phenomenon.
Google might have tried to buy Twitter for $4 billion but that deal was probably turned down by Twitter. After seeing how Google between 2000 and 2005 turned down offers to sell their company and more recently how Facebook founders and investors held out to make a multi billion dollar company, it would not be surprising to see if Twitter might also want to hold out.
But can Twitter survive alone ?
The simple answer to this question is ‘No’. Facebook is a social network whereas, Twitter because of it’s open structure will never become truly social. It might become an interactive news source, but that is still a new concept and untested as far as profitably is concerned.
Twitter has started advertisements. This means trending topics are sponsored. This might a nice way to make money, but no really large company at the moment really has Twitter at the core of its advertising strategy.
There are some minor disincentives to advertisers on Twitter in this age of YouTube. The disadvantage of having a limit of only 140 chars to advertise their product.
So who are the potential buyers?
Google seems to be best positioned to buy Twitter. There are a couple of reasons for this. Google has announced that it wants a social layer across it’s services. The perceived momentum it might be losing against Facebook might be checked with a product like Twitter up its arsenal.
Also Twitter is a free and open platform with 100s of millions of people sharing links. This must mean a big deal when it comes to Google’s core service which is ‘Search’.
The Problem of “What next?” for Twitter
For Twitter, the question is what will it come up with next? Allowing images and more than 140 characters or privacy will make it nothing but a confused social network. This is why, the only way forward for Twitter is a partnership with a company that has a massive presence on the internet.
What are your views on Twitter and its future? Do you think it can go it alone like Facebook has or will it need a buyer to leverage it into a profitable business? Do drop in your comments.
2 Comments
$8 billion for Twitter? Highy overvalued. The best bet for Twitter would be to develop its own advertising model, and monetize it.. and to make a more interactive social platform. By selling it off, it wont be going anywhere. Google was, and always be bad in social domain. They are a great technological company. and should stick with it!
You have a point regarding the valuation but I do not think Twitter can grow without partnership. The reasons I find Google can do a lot with Twitter is because of opportunities for search. Also Twitter is not really a social network.