What? Is Battelle crazy? Hear me out. Think back when YouTube was growing like a weed, and Google snapped it up. Most folks (including me) saw this as Google “getting into the video business,” and sure, that in fact was one part of the equation. But as we all know, making money from consumer driven video ain’t a cakewalk, and hosting that video is really, really expensive. So why did Google really buy YouTube? My answer, which of course looks brilliant given it’s 20/20 hindsight: YouTube was a massive search asset.
Afterall, YouTube now gets more searches than Yahoo, Google’s closest search rival.
So think about that. YouTube was the single fastest growing new form of search on the Web, and Google pretty much outflanked (and outspent) everyone to buy it. Not to get into video monetization, per se, but to harvest and control the most important emerging form of search. In short, Google could not afford to NOT own YouTube.
So, fast forward to today. What’s the most important and quickly growing form of search on the web today? Real time, conversational search. And who’s the YouTube of real time search? Yep. Twitter. It’s an asset Google cannot afford to not own, and also, one they most likely do not have the ability (or brand permission) to build on their own. (Remember, Google tried to build its own YouTube – Google Video – and it failed to get traction. A service like Twitter is community driven, and Google has never been really great at that part of the media business).
That means Google most likely really, really wants to buy Twitter. (So does Facebook, but we’ll get to that in a second). The great twist: Evan and Biz, two of the key co founders of Twitter, have already sold a company to Google (Blogger) and most likely are not keen to do it again. Nor do they have to, given their recent funding and the money they made from pre-IPO Google options.
Add in the fact that Twitter has already said no to a $500mm offer from Facebook, and the fact that Facebook has responded quickly with by opening up its Live Feed status API, and we’ve got a very interesting year ahead of us in the Internet biz. I’ll be watching closely.
(PS – Much speculation lately that Twitter is a threat to Google, see this Merc piece. I’ll respond more to that idea later).
Update: Plenty of folks letting me know of pieces that are related, will post them as the come in. So far:
http://laserlike.com/2008/11/14/why-google-or-yahoo-should-buy-twitter/ from Mike
and http://www.jamesgross.com/facebook-will-be-open/ from James
I’m agree with Garrick Schmitt: “Twitter is also a threat to FeedBurner as well”, and with John too…I think that Twitter is the new target of Google..
Saludos..:)
Has there ever been any discussion about the basic idea of whether Twitter makes economic sense to Google..meaning, will it add any income to Google? Maybe I’m missing something here, but I thought business had something to do with income, or at least some basic sense as to how income might arise in the future. So far, I’ve read very little about viable income streams that even come vaguely close to what is being discussed as the value of the business.
It’s remarkable how quickly twitter has grown. It should be interesting to see how this shakes out as it is such a valuable entity.
Ryan
Great point about the YouTube comparison. We’ve wrote about Twitter as a search tool earlier this week! Glad to see someone else is in agreement.
http://traackr.com/blog/?p=122
What if twitter blocked google’s spiders? That could be a huge blow to them in the coming years.
All right, I guess I’ll lead the other side of this argument. I’m a very big fan of Twitter and strongly believe they will find their way to revenue and profitability. But this won’t happen with Search.
Two main reasons for this:
1- Search is complex and costly – Twitter doesn’t have the resources to compete there.
2- Search is based on indexing ubiquitous content. Twitter can’t even index its own content (if you want to find tweets, you’re already better off looking for them on Google than Twitter).
Now, there is something to be said about Twitter searches as the emergence of a different type of searches, using users collective intelligence to find answers rather than the robustness and reliability of a Google search.
But this is a different discussion altogether…
The real question is, with the recent anti-trust accusations being slung in Google’s way, can it afford to snatch up yet another obvious winner on the internet.
Or, perhaps, IS it guilty of anti-trust activity?
Check out my cartoon on this story at:
http://www.pcdisorder.com/2009/03/google-test-driving-twitter.html
By coincidence, I used search.twitter.com for the first time. I immediately found the owner of a company I want to work for and am following him now. Plus I found out that he lives in my neighborhood… and I know what he looks like. Not a stalker but I will chat him up at the local deli, given the chance.
The point is that the info was super current and handy. No stale url to fumble with and click on.
In my mind, whoever owns the twitter search, holds the key to the universe.
@Santiaggo (Brightkite.com)
only idiots who waste their worthless time on twitter actually think its of any value.
In real life its like a popular IRC network, only worth anything to its few users
What a miserable world we live in, when Twitter is a threat to anything. What a horrible, sadistic world we live in, when Twitter is actually used by anybody.
only idiots who waste their worthless time making comments on articles about twitter actually think their opinion is of any value.
BOOYAH! I have now dissed both “twat” and myself in one post. But it took 219 characters.
This is the stupidest thing I’ve ever read. I can explain to my grandparents why youtube is neat, and they laugh when man gets hit in groin with football. Stating that “conversational search is the most important thing” implies that the people advertisers want to reach are unemployed nerds telling the world they just finished dinner and are about to unload #2. I can see the ad pitch now: millions of users will converge on the most popular tweets, with misinformation about plane crashes or the bowel movements of the rich and famous.
Oh wait, that’s a stupid business plan. I am sure someone will buy twitter. But last I checked, the Googles and Yahoos of the world are losing money hand over first. Just the perfect environment to spend hundreds of millions of dollars are a niche technology. Best for the shareholders, you know.
YouTube, on the other hand, it was easy to see how it would make money. Man getting hit in groin with football is simply always funny.
Is twitter actually for sale and what is their advantage -they have good funding and eventually can add more streams and create content by interest! http://marshalsandler.com/2009/03/twitter-youtube-john-battelles-searchblog/ I think even with folks to who don’t like twitter they might just make it HEH
T is currently valued at $250m. T declined $500m from FB. I have to assume that G’s offer, should you be on the right track, might be in the $750m-$1b range.
If true, I would LOVE to see the spreadsheet that justifies $1b for Twitter. 10b +/- clickthroughs before making a dime on T?
Why in the world would google want to waste money on Twitter? Why don’t they use their hordes of engineers (and money) to make something…better? It shouldn’t be hard to process tweets or anytime of instant message into the google “news” or “blogs” page. Twitter just took the status line off of facebook and based a whole service around it. Why couldn’t facebook just turn their status updates into a twitter-like service?
Maybe google’s servers can keep Twitter from going down on a near daily basis…
Whoever owns twitter is a MORON for not selling, IF he was really offered $500 million…
Twitter is no where near replacing my RSS feeds and, after trying to follow twitter during the Mumbai attacks, showed how worthless it is for ‘real’ news. Not everyone is down with LEET speak and text messaging abbreviations.
Within the past week, The Daily Show and Doonesbury have been clowning on Twitter. That is the modern day equivalent of “jumping the shark.”
Sorry, twits. Let’s quit wasting with the twitter circle-jerk and get on to the next REAL big thing…
There is no reason why Twitter will sell to Google.
Twitter is going to monetize search the same way Google monetized search. They are going to charge advertisers to send little DM’s to people who mention things related to their line of business. For example, I’m a furniture vendor, if someone says they need to buy furniture, I want to advertise to that person. Arguably, that person is further along in the conversion cycle than someone performing a search for “furniture” on Google. For more on “Twitter Paid Search,” see my blog entry: http://inside.nikkoshops.com/twitter-is-the-next-paid-search-venue/.
Why would Twitter sell if they stand to make just a much money from advertising as Google does?
So Twitter is awesome for Taking traffic to your website . It is very
simple to setup and it’s a fun positive way to keep in contact with
people. To get more followers on twitter check out this amazing
tool, Twitter Traffic Machine.
One thing that is weird though is, as far as I know, Twitter is still losing money. You would think with so many people usong Twitter they could come up with some way to turn a profit. It must be a geek thing.
Thanks you veru much John!
I think your side note is more important to your post than you may be letting on. To my mind, this prequalifying you’ve claimed you’d do on Twitter (if only they’d allow you to direct message non-following folks) is something you could already do on your own. I mean, how many people tweet without some other major online presence? If you’d really be willing to spend the time prequalifying these folks on Twitter, then I’d bet you’d also be willing to Google them and find either their direct email address, their blog (with commenting open!), or other useful contact information. And, so, you would contact them there. I imagine you’re perhaps not entirely genuine when you suggest that you’d spend real time prequalifying customers…perhaps you just know, as per your side note, that it’d be something that would come along with Twitter’s acceptance of commercial contact– specifically that Twitter would offer some program where they offer screened and directed advertising the way Google Ads does.
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