Twitter: Lover with Two Suitors
April 11, 2009
Network World’s “Twitter Yet Another Microsoft-Google Battleground” here made clear that Twitter is like a cute guy with two aggressive females interested in going to the mall. The Network World story references a cartoon but there’s not much humor in the write up. The article summarizes the tit for tat approach that each company has offered Twitter’s top dogs. The most interesting part of the article in my opinion was this passage:
Google and Microsoft need to be careful so that in their zeal to win the prize, they don’t sabotage it instead. Microsoft has seen the worth of its Facebook stake plummet, now that Facebook’s overall worth has dropped from $15 billion at the time of its deal to just $3 billion to $5 billion today. And Google’s MySpace deal hasn’t panned out to be all that lucrative for the search giant either. The fact that Google’s purchase of Twitter turned out to be either wrong, or very premature, is actually a good thing. Rather than purchasing an outright stake in Twitter now, perhaps it would be wiser to let it grow a bit–all while testing various ad schemes and monetization plans. The risk is that once Twitter hits paydirt, its eventual purchase price will skyrocket. But the downside is that Google may pay a pretty penny for Twitter now, only to see its investment disappear (think Dodgeball, Jaiku, etc.).
Let me offer a couple of observations.
First, jumping into a bidding war in a lousy economy raises an interesting question, “What happens if Twitter turns out to be the next big thing?” The anxiety might be causing the stomachs of the wizards to churn. If the analysis of the Prisoner’s Dilemma is correct, both of these outfits may be throwing bouquets in the hopes of “winning”.
Second, time is the enemy of both Google and Microsoft in this emerging real time search space. Twitter continues to become more useful. The Twitter jobs service here is a glimpse of its utility. A delay could create the same situation Google faces with Windows on the desktop or Microsoft faces with Google’s Web search. Once an outfit gets a bite on the market, shaking the pit bull loose can be tough.
My view is that sales of Tum’s will go up in Mountain View and Redmond until the wizards open Pandora’s Box.
Stephen Arnold, April 11, 2009
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