Google CEO Eric Schmidt may have told Charlie Rose that a deal for Twitter is unlikely because “prices are still high” but if Google did buy Twitter, here’s what it would mean:
1. Twitter would finally have a business plan. Google would integrate AdSense into Twitter’s search results and probably insert relevant advertising within Twitter’s stream – probably one to two for every 20 Tweets.
2. Google would still be left with about $14.8-billion of cash after spending $500-million to $1-billion on Twitter. Prices may be high – although valuations seem to be declining in Silicon Valley – Google has more than enough cash to splurge on Twitter, still have enough cash to survive the economic downturn.
3. Evan Williams would have made his second major contribution to Google’s strategic vision. In 2003, he sold Blogger.com to Google, which made Google one of the leading players in the emerging blog market.
4. Twitter’s investors – Institutional Venture Partners, Benchmark Capital, Union Ventures, Charles River Ventures, Marc Andreessen, Dick Costolo, Ron Conway, and Naval Ravikant would be extremely pleased, especially those IVP and Benchmarked, which just pumped $35-million into a start-up with lots of users but no revenue or a business plan. It would show the classic Web 2.0 business model was still alive and well.
5. Mark Zuckerberg would be pissed Twitter had slipped through his hands. If only he had offered cash to Twitter instead of Facebook shares, Twitter would be part of the Facebook empire.
6. Google would probably buy TweetDeck for $2-million to $5-million to give the leading Twitter desktop client.