Twitter Wouldn't Sell For $1 Billion, Says Source

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Update to our post last night about Google/Twitter talks: New sources say that Google is interested in acquiring Twitter, and has had talks with the company about a deal. Google’s internal valuation, however, would value the company at a token premium above Twitter’s last round of financing valuation, around $250 million. Some Twitter insiders want the deal, but our sources say CEO Evan Williams wouldn’t sell even for $1 billion. “He may blink, but he wouldn’t do it,” said one source.

Google may also be concerned with antitrust issues around any major search-related acquisition, we’ve heard (and others have noted).

Clearly there’s a lot of posturing going on, and quite possibly some dissent in the ranks at Twitter. The company is officially stating “Our goal is to build a profitable, independent company and we’re just getting started.” Which is exactly what any company would say under any circumstances. The fact that Facebook acquisition discussions got so far last year suggests that they were open to merger discussions. But the valuation needed to get a deal done has increased dramatically since then.

Would Google pay more than $1 billion for Twitter? No idea. But there’s no way Microsoft lets a deal be negotiated without putting its bid in, too. And if these two giants see Twitter as the future of search, $1 billion is peanuts.

The Near Term Deal

Meanwhile, business discussions between Twitter and Google continue. The deal Google wants: a real time feed of Twitter updates to speed indexing. Without that feed Google must independently index each Twitter user periodically to look for updates. That means it’s dreadfully slow in grabbing all those Twitter posts. And it’s also very expensive from a computing resource standpoint. A real time feed would be of huge value to Google, and they’d be smart to nail down a long term deal sooner rather than later.

A real time feed of Twitter posts would negate much of the head start Twitter has in the nascent real time search space. It would be a coup for Google to get the Twitter milk without having to buy the cow. The real question is, does Twitter fully understand the value of this feed?

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