Microsoft or Google Will Buy Twitter in 2010

Nov. 23, 2009 5:01 AM ETTwitter, Inc. (TWTR)MSFT, GOOG10 Comments

Admittedly, that is not a major statement to make, as few companies have the firepower to make a $1 billion + purchase. But I do see this playing out in 2010.

Here’s why.

Social media is revolutionary, but it’s not the best canvas for advertising. We’ve seen various iterations of social media all belly-flop with advertising (UGC being the most notable).

These days, the obsession is with monetizing Twitter with advertising. I don’t think that is the way to proceed. We first made that case in Twitter’s 140 problems where we looked at e-commerce opportunities. Frankly, that was a couple of years ago. Today I see Twitter as a lean and stripped out “content and user management system” with a licensing model. Basically, follow WatchMojo’s latest videos here or my pontifications here. If this is a $1 billion company, so be it. It’s clearly not what you or I think; valuation is largely determined by the greater fool theory, where you just need someone to come along and bid $1 more.

When the recession hit and advertising retracted, I thought this was a good thing for the company, because it forced them to think outside of advertising.

The Twitter PR machine said “Well, we never really wanted to insert ads” but now that the economy has stabilized and advertising is flowing faster to online and wireless, advertising-as-the-model is back in vogue.

Of course, a lot of this is the media writing about it.

These days Twitter itself is hinting at commercial/premium accounts, which is vague.

Honestly, I think Twitter needs to grow up and start to experiment with commercial methods, fast. But since 99% of business models and business plans are DOA, they fear doing anything that shows just how hard monetization is.

Clearly, they wisely raised $100 million before growth slowed

This article was written by

Ashkan Karbasfrooshan is Founder and CEO of WatchMojo.com, one of the leading broadband video content creators, with a library of 5,000 high-quality, professional, premium videos spanning the automotive, comedy, fashion, film, health, lifestyle, music, sports, travel and video game categories. WatchMojo.com has served 60M streams since 2006, currently generating over 5M streams each month and reaching 20M consumers each month in the digital out of home signage market. Having funded the company himself, the company has bootstrapped its way to become one of the few new media content companies that commands guaranteed, recurring, licensing revenues from other media companies. Previously, Ashkan worked in the search market in 2000 and then served as AskMen's VP of ad sales from 2000 to 2005, until the acquisition by IGN Entertainment/Fox Interactive Media. A finance graduate from one of the top colleges in the nation. He is the author of Course to Success: Everything You Need to Succeed Beyond School and The Confessions of Alexander the Great: 33 Lessons in Greatness. His articles have been published on MSN, AOL and Yahoo! and has been quoted in, or linked from Forbes, Barron's, Yahoo! Finance, Business Week, CNET, MSN Money, the Wall Street Journal's All Things D., LA Times, Boston.com, PBS, TheStreet.com, Marketwatch, Tech Crunch, Giga Om, Paid Content, the BBC and numerous other publications and programs. Ashkan authors the http://www.HipMojo.com blog which sites at the convergence of technology, media and investing.

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