Oct 032010
 
Google Should Buy Twitter to Battle Facebook But Won’t
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When Google CEO Eric Schmidt was asked what he thought of
Twitter Sept. 28 at TechCrunch Disrupt, he acknowledged that the microblog should be able to come
up with ad products that are highly lucrative.

“We think they are going to do very, very well,”
Schmidt said, adding that the platform has scaled well.

While he declined to comment on whether Google would try
to buy Twitter, his otherwise frank assessment triggered a new avalanche of
discussion about whether Google should bid for Twitter to compete with Facebook
in social media.

Facebook has garnered more than 500 million users in six-plus
quick years. Google, which is twice as old as Facebook,
has over 1 billion searchers but these folks come to its search engine for a
quick information fix.

Facebook, with all of its content sharing and
communications tools, is sticky. In August, the social network surpassed Google
in total minutes users spent on the Website. The low barrier to entry and
stickiness make Facebook a tantalizing proposition for social media
advertisers.

There is talk that Facebook will soon partner with Skype for some VOIP integration, which would boost its
communications quotient. Worth a reported $33 billion on paper, Facebook’s IPO
will be the next hottest meal ticket when it finally comes in the next few
years.

So forgive people when they say Google, which has fallen behind in the social media game after launching orkut, Google Social Search and other meek tools, needs to do something big to, if not steal some of
Facebook’s magic, temper its rise.

Dave McClure, founding partner in the 500 Start-Ups seed
fund, told
Reuters about Google:

“Is there a scenario where you think you don’t have
to buy Twitter in the near future? I don’t see it. Whatever your math is, you better
do it soon, because youre getting killed by Facebook.”

Business Insider’s Henry Blodget noted that in addition to the potential Skype integration, Facebook could build
a search app “that starts siphoning some search revenue away from Google”
or even replace the browser and desktop for some people, blighting Google’s growth.

Buying Twitter, which has more than 160 million users, would
significantly boost Google’s place on the social media meter. Of course, not
everyone believes Google has to buy Twitter, for what Blodget said could be $5
billion.

Forrester Research analyst Augie Ray scoffed at the idea
that Google must buy Twitter to get credibility in social media. With $24 billion a year-plus in advertising, Google is doing just fine without it.

Ray added that Google is building up its social media arsenal with smaller acquisitions, such as Slide, Jambool, Angstro and SocialDeck.
Leveraged appropriately for Google’s 1 billion searchers, Ray believes Google
still has time to prove its merit in social media.

“Google is facing no problems so pressing that it
needs to leap into an acquisition merely to appease those who feel it has a
social media credibility problem,” Ray concluded.

Drawing on the history of Twitter’s management, search
engine expert John Battelle said Google won’t buy Twitter because the company won’t sell to Google or
anyone else.

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