If Twitter continued to sell its firehose to Google, fewer searches would occur on Twitter’s internal search engine where the microblog platform can serve its own ads. That’s why sources familiar with the negotiations tell me Twitter wouldn’t renew the data access deal at any price, or at least set a ludicrously high price to sink the deal. Cash and increased visibility on Google Search was more valuable to Twitter in 2009 when it was still trying to gain serious traction. But by July 2011 Twitter was more established and ready to try monetizing without Google. A firehose deal would have impeded this, so it’s understandable why Twitter walked away.
There are a lot of conflicting reports on exactly how negotiations went down, stirred up by the launch of Google Search plus Your World (Search+) which favors Google+ results. Regardless of the exact details, the underlying fact is that it the inclusion of tweets in Google Search wasn’t the best thing for Twitter.
[Update: As Liz Gannes points out, Twitter did do a firehose deal with Bing. However, Twitter may have seen Microsoft and Bing as less of a threat, and viewed exposure to Bing's early adopters as more advantageous than exposure to Google searchers.]
Actually, I think backing out of the Google firehose deal was a courageous move for Twitter. It showed the company was willing to bet on continued growth and making Promoted Tweets, Accounts, and Trends work as a major revenue stream. Since these sponsored content types are artificially injected into Twitter Search results and the home page, they wouldn’t have appeared in Google Search.
Unfortunately for the end-user, no deal means Search+ isn’t quite as useful as it could be, as Steven Levy describes. Google has the ability to point to relevant Twitter accounts in its People and Pages Box since they’re not strapped with rel=nofollow, but doesn’t currently. Maybe Google will change that soon in the name of offering the most relevant results. Maybe it will change that years down the road due to pressure from the FTC or Justice Department. By then Google may have weathered the monopoly paradox and accomplished its goal of using its natural dominance in search to grow Google+. We’ll have to wait and see.
Meanwhile, Twitter Search still needs a lot of improvement, particularly around surfacing relevant older tweets. Hopefully with time it will come to encompass functionality Google Search could have provided.
As John Battelle says, the politics surrounding data access make it very complicated for anyone to offer comprehensive personalized search. So for now, real-time search remains fragmented and less effective than it could be, but Twitter has a chance to stand on its own two little bird talons.