Buyout would mean Tweet business
Published 09/04/2015 | 02:30
Why would Google want to buy Twitter? On paper, there are a few clear pros and cons.
Google's biggest incentive is to expand its online advertising reach in the face of aggressive competition from Facebook, the unquestioned king of social media. Twitter ticks these boxes: it has almost 300 millon active users, 80pc of whom use the service on all-important smartphones.
Google has all but admitted that its attempt at social media, Google Plus, has not worked out as planned. And a Twitter acquisition would give Google the holy online Trinity of first tier search, social and video (via YouTube) properties.
Besides, it has the money with a reported stockpile of €55bn in cash, far above Twitter's current market valuation of €31bn. And US tax repatriation laws mean that it is heavily incentivised to spend a big chunk of that money rather than hoard it. On the other hand, there are a few big challenges for Google if it wants to buy Twitter. The search giant, which employs over 2,500 staff in Dublin (and many more contractors here), is already in the dock with EU competition regulators over how it treats competitors in its search result rankings.
With online advertising now taking over from broadcast and print media, anti-trust tsars' antennae would shoot up at the prospect of a Google-Twitter-YouTube trifecta.
But if it can land Twitter, Google would win big.