There is a rumour on the street that Twitter is once again in acquisition talks. This is no surprise. In many ways it is the belle of the social media ball and all the big Silicon Valley princes want a dance and shot at her hand in marriage. More specifically, two princes are vying for Twitter’s attention: Facebook and Google.
This time around, Twitter’s valuation has ballooned to 11-digits: $10 Billion. Having doubled in value in under a month and pushing it into the range of stratospheric multiples (220 times earnings…time to buy tulips?) that’s a lot of zeros on a golf cheque. Whether or not that is a reasonable price is an entirely separate discussion for another time.
But this article isn’t about the price Twitter can command, nor is it about Facebook, other than to say that I personally hope that Zuckerberg and company are not successful as a suitor. Facebook is a walled garden with a somewhat dubious track record for doing the right thing. Not to mention the prospect of Farmville on Twitter makes me cringe.
The reason I’m rooting for Google is because, to me, the real value in Twitter is in the constant inflow of up-to-the minute data generated by its users. This data is valuable not only from a commercial perspective (read ‘advertising’) but also in a more meaningful social context.
Curation is a big thing right now. Personally I think the term does a huge disservice to those who actually curate things for a living. It’s a tough job and deciding what’s important and saved and what get’s discarded or devalued; it is more difficult while you’re inside the fishbowl. The fact is that in the digital world storing data (e.g. Tweets) isn’t as big a problem as finding and accessing the data you need when you need it. Twitter produces a torrent of data, some 90 million tweets per day (as of November 2010) and growing exponentially. While arguably many of these tweets have the shelf-life of toast, some are very significant (as witnessed by recent events on Egypt) and en masse, form an intricate tapestry of collective context.
Unfortunately, Twitter’s current infrastructure is fragile at best and can barely manage its data as it happens, let alone anything it has archived. The Fail Whale, Twitter’s unofficial mascot held aloft by his bird friends and displayed when the site encounters technical troubles and overloads, collects more frequent flyer points than George Clooney’s character in Up in the Air. Searching for anything older than a few days is an exercise in futility: Twitter’s “Older Messages temporarily unavailable” warning in reply to searches has proven itself as temporary as Cambrian granite.
Google, on the other hand, knows how to collect, store, manage, and search data. Very, very well. Google also has a massive amount of computing resources (estimates peg GOOG’s server inventory in the 500,000 range) and knows how to operate a service with a high degree of robustness—when was the last time Google was down? Google is also desperate to gain a toehold in the social web (Orkut doesn’t count…unless you’re in Brazil) and seems to have had a dry spell on the acquisition front as of late (most famously, Groupon’s spurning of its $6 Billion purchase offer). If Google weds Twitter, they gain an invaluable amount of real-time data that also meshes very nicely with their lucrative AdSense/AdWords model from the union (I should add, AffinityClick *also* offers CPC ads! Twitter, call us!) But it’s not a one-sided deal: Twitter gains access to Google’s deep computing resources, talent pool, and operational expertise, and, of course, a nice payday for all at a valuation which seems very…generous.
But to me, the sum is greater than the parts. I want all that raw, unfiltered information that pours out of millions of Twitter users to be organized, catalogued, and preserved through Google’s massive data index so I can pluck the needles out of Twitter’s haystack. Fewer Fail Whales would be nice too.
[Originally published on the AffinityClick blog]