Should Google Buy Twitter?

3 minute read

Twitter always seems to be in the news, and seemingly it’s for all the wrong reasons. The microblogging platform has become such an instrumental public service, important for political communication and the diversity of ideas. Twitter has clearly been transformative in the shaping of a new media ecology. However, the stock continues to tank.

Recently, the company’s third quarter earnings sent the stock plunging 13 per cent. Most of the issues again appear to be with Twitter failing to lure new advertisers to the service (its primary source of revenue). Twitter reported $569 million worth of revenue for the quarter, at the same time last year revenue was $361 million. Twitter is clearly making money, yet investors continue to steer clear of the company and the overall outlook seems bleak (Twitter also recently cut 8% of its workforce).

Perhaps the most critical issues investors have with Twitter is stagnating growth. Twitter reported to have 320 million users — greatly fewer users than Facebook. One common thread in technology stocks are investors have a tendency to put a lot of emphasis in growth. Twitter is clearly an important public service and communicative medium, but its user base has flattened out. The problem with this is everyone already knows about Twitter, and people who have once signed up to the service yet don’t use the platform are hard to bring back at this point.

Co-founder and returning CEO Jack Dorsey has already ramped up new Twitter services. It recently launched Twitter Moments — a curated version of the best tweets and news of the day sorted by categories. Moments is Twitter’s secret Project Lightning which it has had in the works for a period of time. Dorsey is also reportedly repairing Twitter’s relationship with third-party developers. Is Twitter Moments really going to save Twitter? Does Twitter need saving? Why is there this constant obsession with growth?

One big advantage that Facebook has over Twitter is it has many more social signals — the key word here is signals. Facebook knows a lot about me, it knows where I’m from, who I’m friends with, the products I like, what I do and a whole lot more. Twitter on the other hand doesn’t know much about anyone. While this might not be a problem for people who like Twitter and use the platform, it’s a problem for advertisers. Many advertisers are interested in targeted advertising – that is ad placements which are not only targeted at specific demographics and people but are also relevant.

While search is still incredibly important and will continue to be, Google clearly sees the importance of social signals — after all, it created Google+ for that purpose. However, Google’s attempts at building a social network that can grow and compete with the likes of Twitter and Facebook hasn’t occurred in the way many envisaged. From many perspectives (unless your a photographer or tech geek) you probably don’t use Google+. The fate of Google+ is still very much unknown, but it doesn’t look promising with Google recently removing a lot of the products of the service into their standalone apps and services, such as the very popular Google Photos.

Instead of attempting to build a social network from the ground up, perhaps the best thing for Google would be to buy Twitter. Google would then be able to successfully own a social network and make use of social signals but it seems that Twitter will benefit too. Google will be able to integrate Twitter with Google accounts, meaning the creation of many more ‘signals’ about Twitter users — this would bring more advertisers to the platform. It could also be argued, that a Google owned Twitter could be able to create more growth on the platform through integration with Google accounts. Although, Google failed to do this with Google+ but maybe with an established social media platform this will be easier to achieve. With $70 billion in the bank, Google can definitely afford it.