Twitter Co-Founder Responds to Google Rumor

Apr. 3.09 | About: Alphabet Inc. (GOOG)

"My inbox is flooded this morning with requests for a response to the latest Internet speculation about where Twitter is headed," blogs Twitter Inc. co-founder Biz Stone in a post entitled "Sometimes we talk." It comes in response to a report Thursday night that Google Inc. (NASDAQ:GOOG) is in talks to acquire the fast-growing microblogging service.

"It should come as no surprise that Twitter engages in discussions with other companies regularly and on a variety of subjects," continues Stone. "Our goal is to build a profitable, independent company and we're just getting started."

Sources close to Twitter tell The Deal the rumor of a potential "Twoogle" is without foundation.

TechCrunch co-editor Michael Arrington created quite a stir in the Twit-osphere when he posted a blog late Thursday saying, "Here's a heck of a rumor that we've sourced from two separate people close to the negotiations: Google is in late- stage negotiations to acquire Twitter."

In the middle of the night, another tech reporter blogged a different story.

"While the news that Google was in 'late-stage' talks to acquire Twitter, which TechCrunch reported last night, certainly sounds exciting, it isn't accurate in any way, according to a number of sources BoomTown spoke to close to the situation," blogged Kara Swisher, co-executive editor of AllThingsDigital, which publishes the BoomTown blog.

According to Swisher, the two companies have been talking, but the discussions have focused on integrating Twitter's real-time search technology with the Mountain View, Calif., company's widely used search engine. Sources told The Deal she has it right and Arrington has it wrong.

"If Google isn't in talks to buy Twitter, it should be," weighed in Henry Blodget, the former Internet analyst who is CEO and editor-in-chief of The Business Insider (formerly the Silicon Alley Insider). "Specifically, it should offer the company $1 billion, cash."

Blodget argued that Google "needs a huge new growth engine and Twitter might just fit the bill." On the valuation, said Blodget,"$1 billion is couch change for Google. Google generates $1 billion of cash every two months. If Twitter ends up being worth $0, as some people persist in thinking, Google can just say 'oops' and take a minor write-off."

Twitter has raised a reported $55 million in venture capital from Institutional Venture Partners, Benchmark Capital, Union Square Ventures, Spark Capital and angels Ron Conway, Mike Maples Jr., Chris Sacca and Betaworks. It is widely considered a hot property, despite its lack of visible revenue. Facebook Inc. of Palo Alto, Calif., tried to buy it last year in a deal reportedly worth $500 million, but talks broke down when the two couldn't agree on the value of Facebook stock that was part of the deal, Facebook investor Peter Thiel told BusinessWeek this month. -Mary Kathleen Flynn