Ok, you ask, what possibly could be the connection between the suggestion of Henry Blodgett that Google purchase Twitter for $1 billion and the Jews?[see Henry's full posting below] Well, besides the fact that there are a nice number of members of the tribe at both companies, I really am using the "Good for the Jews?" question as a way of asking two parts:
-Is this good for the world in general?
-Is this good for Israeli start-up scene?
On both counts, answer I come up with is NO!!
Regarding the world in general, or more specifically the start-up world, wacky prices paid to one-off "success" stories are never a good thing. I am not going to start arguiing right now if Twitter has or has not brought about a real paradigm shift (as I believe Google did, not so much with search technology itself but how it was applied). (I do not believe Twitter has yet accomplished that). But paradigm shifts do not a business make (sometimes they could, a la Google).
Twitter has yet to show any clear business direction, and until they do their value is somewhere between zero and the amount of money invested in building the product and attaining the user base.
For the Israeli start-up scene, we need to be building businesses. The more entreprenaurs are fooled by Twitter-like companies that building a no-revenue company is a good idea we will sink deeper into a real depression of the tech sector here in Israel. We do not have the capital allocation in Israel that allows for silly investments (just think how many companies will get funded to be the next Twitter...if Google buys them for $1 billion).
Google Should Offer To Buy Twitter For $1 Billion (GOOG)
| 367.49 | Change | % Change |
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| -2.29 | -0.62% |
Specifically, it should offer the company $1 billion, cash.
Why?
Five reasons:
Google needs a huge new growth engine and Twitter might just fit the bill. The current search product cycle is coming to an end. Google needs an "Office" to go with its "Windows." It hasn't found one yet. Twitter--and real-time search--could end up being a monster. If Google waits around to see whether it really WILL be a monster, Twitter will be a hell of a lot more expensive. Remember when Yahoo's Terry Semel whiffed on buying Google?
Twitter is a hell of a lot more relevant to Google's business than other big Google ideas, such as YouTube or Larry Page's plan to have Google solve the world's energy crisis (see his crazy talk of two years ago). Twitter is also about communications, which is the one part of the content-communications-and-commerce Internet tripod that Google is still weak in.
$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. If Twitter ends up being worth a lot more than $1 billion, however, as we and others think is likely, Google will make money. If it ends up being a monster, Google will make a lot of money.
Twitter could conceivably threaten Google's cash cow--search. This "real-time search" meme is actually a compelling story-line. If you want to know what people are talking about right now, you go to Twitter, not Google. Twitter hasn't figured out how to make bank off that yet, but it may well do so. Remember how much ridicule was heaped on Google's worthless "search engine" in the early days?
Like Google, Twitter is already a verb. What company do you know of that owns two verbs?
Would $1 billion be enough to get the Twitter boys to part with their baby? It might, actually. $1 billion is still a lot of money, especially for a company with no revenue. And Google's global distribution and technology infrastructure would be a help to Twitter. So they'd be silly not to take the offer seriousy.
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