Just weeks after Google chief executive Eric Schmidt labelled social networking service Twitter a “poor man’s email“, the two companies are now reportedly discussing a potential takeover.
The rumour first appeared late last week on prominent tech-blogging site TechCrunch, which said that according to two unnamed sources, “Google is in late stage negotiations to acquire Twitter”.
Blogger Michael Arrington also claimed the acquisition price would be “well north” of the $US250 million valuation recently placed on Twitter.
Arrington has since updated the post, saying that according to another source the two companies are only in early stages of negotiations.
But Twitter has not confirmed or denied the talks, with co-founder Biz Stone posting on the Twitter blog that “it should come as no surprise that Twitter engages in discussions with other companies regularly, and on a variety of subjects”.
“Our goal is to build a profitable, independent company, and we’re just getting started,” Stone said in a post, which he says addresses “a response to the latest internet speculation about where Twitter is headed”.
Schmidt has also recently shot down any rumours of acquisitions. “I’m not sure prices are at their low yet,” Schmidt said.
“The situation globally is pretty dire. We are certainly looking. We haven’t seen anything yet that was really exciting.”
But Schmidt has since recanted on his previous criticisms of Twitter, saying in an interview with CNBC that “we think Twitter did a very good job of exposing a whole new way to communicate”.
Twitter, which allows users to send messages of up to 140 characters to “followers”, has surged in popularity since its launch in 2006, but has yet to monetise its services.
Tech analysts believe a merger would help earn funds for both Twitter and Google, which has been struggling to produce revenue from its non-advertising related services.
Several analysts believe a major project between the two companies would be the development of a real-time search engine, an area where Twitter has placed considerable resources.
If the sale goes ahead, it would be the second deal for Twitter founders Stone and Evan Williams, who sold blogging website “blogger” to Google in 2004.
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Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
