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EVERY FEW MONTHS, a rumour crops up that Google is interested in buying Twitter.
It cropped up again this morning, and may have contributed to a 4% rise in Twitter’s stock price. One outlet reported rumours that Twitter had hired Goldman Sachs to fend off two possible takeover rumours, one from Google.
We have no idea if the rumour is true. Twitter declined comment and we haven’t heard from Goldman Sachs.
But if it turns out to be the case, there’s a strong precedent in the tech industry for this kind of acquisition. In 2008, Microsoft tried to buy Yahoo.
Microsoft was worried about Google dominating a new market, search. Microsoft tried to build its own competitor, Bing (then known as Windows Live Search), but it didn’t take off with users.
So Microsoft figured it would buy the number two player, Yahoo, and combine its search and search ad business with Microsoft’s own.
Fortunately for Microsoft, Yahoo fought the deal and Microsoft walked away — months before the economy collapsed and Yahoo’s shares lost more than half their value.
As then-Microsoft CEO Steve Ballmer said in 2011, “Sometimes you’re lucky.”
Facebook threat
Like Microsoft was threatened by Google, Google is threatened by Facebook, which is doing a better job than any other internet company of competing with Google for user attention and ad dollars.
Google tried to build its own competitor to Facebook, Google+. But Google+ never took off with users, and has been relegated to a sign-on platform across Google services with a few interesting features for sharing photos.
So, Twitter. It’s the number-two social network, and has all kinds of data about connections between users and their interests. That data could be very helpful to advertisers.
Twitter is worth more than $33 billion. Google would have to pay a pretty premium to buy it. Say, $50 billion. Google has the cash — more than $64 billion at last count — and could certainly deal with the taxes from repatriating all that cash from overseas.
Big costs
But there would be huge integration costs. It would be a huge distraction. Antitrust regulators, who are already looking at Google under a microscope, would be very interested in the deal, too.
Sure, Google might be able to take Twitter’s information about users and the connections between them and use it to target ads even more effectively than it already can. But there’s a limited pool of advertising money.
Advertisers are going to keep spending with Facebook because that’s where the people are, and Facebook is getting better and better at targeting ads to those people.
The time for Google to buy Twitter was back in 2009, when it would only have cost $1 billion — about 4% of its annual revenues. That ship has sailed.
So a no-deal Brexit would be bad for the economy but so would an orderly Brexit. And does anyone really believe that inflation is only 1 percent per annum in this country? I assume the Central Bank guy is not renting accommodation or paying crèche fees.
@Earth Traveller: yes…inflation is low. Are any of your day to day products in a basket of goods going up?
@Earth Traveller: yes…inflation is low. Are any of your day to day products in a basket of goods going up? Competition is driving retail prices down. The majority of people own their homes and interest rates are dropping…
@joe: yes they absolutely are
More tax from FFG …
Our central banks “expert” analysis seems to be to look at the current number and then add a little bit onto that!
And aren’t we all so lucky that FFG never brought us to the brink of recession!
Its always somebody else’s fault, brexit, or the financial crash, or the butterfly that flapped its wings the wrong way in brazil, its never the fault of the useless idiots in dail eireann.
We need to stand up stop thinking about how bad it will be without England financially and start thinking about Irish unity and how it will benefit us as a nation of course if won’t benefit us straight away but a few years down the line it will. Those figures the central bank send out I would take them with a grain of salt .Time to stop moaning and get on with it.
@Donal Carey: what if the vote goes the other way ,what then and it is likely to do that as the uncertainty that is around the corner
@Donal Carey: we really don’t want or need that money pit!
@FlopFlipU: Negative everything points to a United Ire and it’s about time
Once northern Ireland see how britain has betrayed them, it will a work itself out.
What will they use to scare us with when its all sorted.
Is this the same regulator that predicted a soft landing at the height of the Celtic tiger?
The banks will be a great help to struggling people. They give you an umbrella when the sun is out, then take it off you when it’s raining
Scare mungering again like 12 years ago
@Joseph Molloy:
You may have missed it, but 12 years ago the proverbial muck hit the fan in this country like never before and we’re still suffering the consequences. Where exactly do you see the scaremongering?
Brexit won’t happen. English are stupid alright but not economically suicidal. London is the powerhouse and voted remain. Money talks.
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