Mark Evans asks an interesting question in his post “Who’s the Right Buyer for Twitter?”
A different - and perhaps better - question is who’s right buyer. For whatever reason, Facebook doesn’t seem like right choice to carry the Twitter to the next level. My fear is once Twitter is within the Facebook fold, whatever je-ne-sais-quoi it had will disappear to the point where Twitter will stop being Twitter.
But the reality is Twitter’s in play. It’s entertaining offers, and waiting for the right deal to come along.
The problem with Twitter is that there’s just no way for them to make enough money to support themselves. Their only viable revenue stream at this point is advertising and I don’t see any type of Ads fitting Twitter’s needs.
Let’s run down the list…
Banner Ads: It wouldn’t be hard to do but in order to make it work you’d have to (a) blanket the site with them and (b) kill off all the feeds and third party apps (because a lot of users never visit the actual site anymore). Because of those two factors I don’t see this being a viable option.
Pop-Up Ads: Suffers from all the above mentioned issues and would alienate users in the blink of an eye.
Which brings us to the only viable option.
In-Line Ads: These types of Ads (text ads embedded into twitter feeds like regular tweets) are probably the only realistic ad that Twitter can get away with. But you have to remember Twitter needs some pretty massive hardware to keep going and text ads deliver the lowest yield of any type of Ad. So the question then becomes…
How could Twitter make enough off of inline text ads to pay for their massive bandwidth and processor needs?
The Answer: They can’t. There’s just no way. Accepting that fact brings us back to the original question because now the question turns to…
What other assets of value does Twitter have that could compensate for the fact that it’s destined to lose money?
The Answer to that is simple: Information. Twitter has tons of information at it’s fingertips if someone can find a way to harness it right. So the final questions is…
What company do we know of that’s an expert in text based Ads and which has a business that focuses almost entirely on collecting and using information?
The Answer: Google. They’re the only company with the resources to keep Twitter going and the ability to harness the information Twitter can provide. No other company even comes close (save maybe Microsoft if they got their act together).
So to my eyes, Google is Twitter’s only hope of actually surviving. Unfortunately, Google also seems to be “the place where startups go to die.” But Twitter’s cheated death before with far fewer resources so I have to ask…couldn’t they manage it one more time?