What would be a remarkable story emerged in the world’s media this week—Google could be about to buyout social media giant Twitter. This would be one of the largest business acquisition in history, with experts suggesting it could cost Google upwards of $50 billion. "Google Buys Twitter" would certainly make for an iconic business headline.
It’s currently unclear if there’s truth behind the speculation, and it has to be noted Twitter and Google have endured an unusual relationship since the former's inception. There has been some activity between the two over the last few months, which may be irrelevant, but for the second time this year the buyout rumour has surfaced. Will this be one of the stories of 2015, or a soon forgotten bit of noise?
The Buyout Rumours
The question is why Google would want to buy Twitter. The answer likely lies around their awkward attempts to position themselves in the industry. Google planned to steal social media supremacy off Facebook with its platform Google+. The general consensus is that this has failed rather miserably (although it does have 540+ million users, few use the service as they automatically have an account when they sign up to Gmail), and the format may even be gradually phased out.
Google would need a high-ranking replacement, and Twitter is clearly the best option. With 250+ million active users, the service is booming in popularity and looks set to continue its growth. Consequently, the news emerged this week a deal may happen.
English broadsheet The Guardian reported on the matter, highlighting how in 2009 Google entered negotiations with Twitter to acquire them for $250 million. Nothing came of this story, but in January 2015 the buyout news resurfaced (causing Twitter’s stock price to rise by 3.3%) before disappearing again until this week.
The media world weighed in speculatively on the situation, with much emphasis placed on how much the deal would cost—Twitter is worth $34 billion. As The Guardian put it, “For Google to buy Twitter now it would have to pay a healthy premium over and above the current market value, which would put it in the region of $50bn.”
They went on to state, “Google has a sizeable cash stockpile of over $60bn, but it’s not in the same league as Apple’s $178bn and is less than Microsoft’s $90bn.” For Google to buy Twitter they would have to “repatriate a chunk of that cash and therefore pay tax on it, which would eat into its maximum cash buying power.”
Along with the momentous implications of the buyout was the announcement Twitter’s stock had spiked again—this time by 4%. Alongside this it recently emerged that Google plans to begin using relevant Tweets in their highly prized search engine results pages (SERPs), hinting the two had struck a deal of some kind. Whether this involves a total acquisition remains to be seen.
A Brief History of Incredibly Expensive Business Acquisitions
The business world has seen a series of major deals over the last two decades involving vast sums of money. Last year Facebook purchased WhatsApp for a remarkable $19 billion and alarmed many by the sheer enormity of the cost, but there have been numerous other noteworthy big business deals. Here are some of the most intriguing:
- Intel made a major deal in 2010 with the acquisition of anti-virus company McAfee – this cost $7.68 billion.
- Microsoft acquired video communication company Skype for $8.5 billion in 2011.
- HP bought Autonomy (a data service) for $10.3 billion in 2011.
- Oracle bought rival PeopleSoft for $10.3 billion in 2004, which took almost two years to piece together.
- Google acquired Motorola Mobility in 2011 for $12.5 billion.
- Vodafone Group acquired Airtouch Communications (an independent wireless company) in 1999 for $57.4 billion in a bidding war with Bell Atlantic.
- AT&T acquired BellSouth in 2006 for $67 billion in an attempt to dominate telecommunications.
- Comcast acquired AT&T Broadband in 2001 for $76.1 billion to improve its broadband service.
- In 1998 SBC Communications acquired Ameritech for $68.2 billion.
- In 2000 AOL purchased Time Warner for $186.2 billion.
- The Royal Bank of Scotland Group, Fortis, and Banco Santander acquired ABN Amro Holding for £100 billion in 2007.
- AOL bought Time Warner for $164 billion in 2000 (a move which became a disastrous failure).
- Finally, Vodafone Airtouch acquired Mannesmann in 1999 for $185.1 billion.
Clearly a Google purchase of Twitter isn’t out of the question. The search giant could buy Twitter with a mixture of money and stock (Google is valued at some $360bn), which would position them nicely at the forefront of the social media industry. We’ll have to wait to find out.
In Other Twitter News
The company launched Curator, a free tool for media publishers. You have to apply for it on the website, but once you’re in you have access to (unsurprisingly) a social media curation service which can be used to “discover, curate and display the best Twitter content on any screen.” Essentially it’s a real-time device which can be used to unearth trending topics, relevant conversations, and display the best content for the benefit of your audience.
The Twitter experience received a minor overhaul this week. The famed Retweet was tweaked by an update – users are now able to easily add a comment alongside anything they wish to Retweet. Prior to this update users had to use a convoluted method to get this done, so this is a welcome addition.
It’s not quite perfect as these commented upon Retweets (accompanied by a colourful profile logo from the source, often with an eye-catching picture) now appear as a quite bland piece of text. However, this is something Twitter can perhaps update in the future.
Finally, and somewhat ironically, Twitter look set to add new features to their search results. They are clearly testing a beta version as only certain users have access to it, but the change will apply filters for users to search through accounts based on popularity, photos, videos, etc. It’s effectively an advanced search feature.
