At the beginning of this month, Twitter announced a deal with Google to make tweets searchable in Google search results. It’s the first step to solving Twitter’s problem of slowing growth in monthly active users. With tweets showing up in Google search results, Twitter hopes that non-users will learn about Twitter and sign up.

The partnership is resurfacing some discussion about whether or not Google could dig into its pile of cash and buy Twitter. The buzz is not new. At the end of January, Twitter shares rose on yet another round of rumors that Google was interested in an acquisition.

There’s good reason for the speculation, but Google should be smart enough to know that buying Twitter would be like buying a fancy garden statue. It’s cool to have, but it’s way too expensive and has little function.

Let’s start off with the case for a Twitter acquisition. It sounds good on paper: Google’s foray into social media failed to uproot Facebook and Twitter. Twitter would immediately give social media strength to Google’s already impressive range of products. Imagine Google+ and Gmail with integrated Twitter functions. Additionally, acquiring Twitter would mean acquiring Twitter’s powerful real-time search feature and content, which would greatly supplement Google’s search engines.

Acquisition is also the name of the game in the tech industry. Facebook has made a number of huge acquisitions, from Oculus Rift to WhatsApp. Google has bought a number of companies to broaden its portfolio of technology, from Waze — a map and navigation application — to Boston Dynamics — a robotics company that is best known for its robot dogs. The company even bought Motorola in a blockbuster deal, before realizing that the investment was a flop and shopping it off to Lenovo.

Google also has the money to pull off a Twitter acquisition. Current estimates put Twitter’s value at about $24 billion, which Google can easily pay for in cash.

But that’s also where the deal falls apart. It’s hard to justify paying $24 billion for a company that has just shy of 300 million active users. For comparison, WhatsApp was acquired by Facebook for a record breaking $22 billion last year. WhatsApp boasts over 700 million active users.

For the heftier price tag and smaller active user base, it’s hard to argue that Twitter has value in other places that would justify an acquisition. Although Twitter has real time search functions and a rich library of user-created content, those services would serve as a supplement — at best — to Google’s trademark search engine.

To prove this point, look no further than the most recent partnership deal. The fact that Twitter is relying on Google to drive traffic to its site rather than using its own homepage and News Feed shows that Twitter needs Google more than Google needs Twitter.
There’s no doubt that Twitter has some interest to Google, but the facts speak for themselves: Twitter is just too expensive.

Brian Cheung is a senior broadcast and digital journalism and finance dual major. His column appears weekly. He can be reached at [email protected] and followed on Twitter @bcheungz.

Published on February 16, 2015 at 12:36 am