Google and Twitter: Expect ads, not acquisitions

We've thought for many a moon that News Corp should be looking to acquire Twitter to enhance MySpace, particularly in light of Facebook's recent switch to a real-time news feed. But the latest reports are that Google is the billionaire cash-waver at the doors of Twitter HQ, and the companies are talking both acquisition and co-operation.

We feel an outright acquisition is unlikely, however. Earlier this month, Todd Dagres -- founder of Spark Capital, a leading investor in Twitter -- spoke about how it and Twitter have clear-cut plans to monetise the service, and he didn't for a second hint towards an acquisition just yet.

"All of a sudden there will be some changes that won't undermine the experience or the virality," he told Innovation Economy, "but it will be pretty obvious how we're going to monetise it... We're in no rush right now."

The likely outcome

Twitter's most valuable asset is its community of highly vocal users and their straight-to-the-point news reporting and opinions. Setting up Twitter as a real-time search engine with Google's help, incorporating highly relevant contextual advertising alongside results, tweets and through an API, would mean the company could make money without selling out. Although we expect anything along these lines would have to be substantially more integrated into the overall Twitter experience than simply sticking AdSense ads on results pages, which Twitter could do without Google's help.

One not-entirely-daft idea would be to display ads for a business' Twitter account when something from that business is searched for, charging said business for a clickthrough to their profile or a 'follow'. And with the talk that businesses are to get paid 'pro' accounts on Twitter, this would fit in neatly.

Another option is something akin to Google Blog Search, which groups together posts about the same subject, and links to them under a single headline. Google could look at all the topics currently trending on Twitter, and sort associated tweets as it does with blog posts.

Either way -- acquisition, co-operation or bugger all -- that Google is in bed with Twitter means Microsoft is, in one way or another, probably a little cross. News Corp should, in all rights, be a little saddened too. And maybe Yahoo too. None of them have anything like Twitter, and all could undoubtedly have tried to bring something money-making to the table.

As this story develops, get a peek at what's next for your Twitter homepage in our recent report.