Many eBay users will be very quick to point out that they feel eBay has lost its luster (to put it mildly). Some think Google could find itself on a similar path.
BusinessWeek is running an article basically warning Google to avoid such a fate. I think Google has a long way to go before it has to worry about getting to an eBay-type status, but the author makes some valid points.
“Turn back the clock to the last recession, and you could have said almost all of those things about another company: eBay,” says BW’s Sarah Lacy. “But I bet in a few years Google doesn’t want to look anything like eBay does now: a company with a solid core business whose growth is nonetheless slowing rapidly and has little to pick up the slack, despite billions of dollars spent on acquisitions. I’d also wager Google’s shareholders don’t want their stock to drop more than 80%, suffering the same fate as eBay investors in the years since that stock peaked in December 2004.”
Lacy gives Google five ways it can keep its edge and avoid an eBay-style fate, but I want to talk about her first one – “buy Twitter.”
This is certainly not the first time somebody has brought up the idea of (or even predicted) Google purchasing Twitter. Lacy suggests it would be wise to make Twitter a ridiculously high offer before someone else does, because it’s bound to happen sooner or later. She likens it to Yahoo having the chance to buy Google for $3 billion back in 2001.
Google has made remarks playing down the importance of both real-time search and Twitter itself, but the need for real-time search isn’t going away, and it’s hard to imagine that Google has absolutely no interest in it. John Battelle put it very well in a post last month likening Twitter to past Google acquisition YouTube:
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).
Ok, yes Facebook has recently gone more Twitter, and it is bigger. In fact, Facebook is even narrowing the gap between itself and Google (despite user who are disgruntled over the recent changes).
But Twitter is the fast growing online community, and it doesn’t have much in the way of a monetization model. Not a bad quality in a company you’re looking to acquire and implement your own model on. There’s more to real-time search than just Twitter, but that’s a pretty good chunk of it, and an ever-growing chunk at that.
Google isn’t showing any signs of going for it yet though. It could just be a fantasy that will never make it out of the confines of the blogosphere, but it could also be a key decision in Google’s future for better or for worse. There are simply too many talking points to ignore the possibility.
Do you think Google should make Twitter an offer it can’t refuse? Share your thoughts.
