In an effort to monetize logged-out users, Twitter is making itself more searchable through its renewed relationship with Google
Twitter announced this week that it has struck a deal with Google for tweets to appear in Google Search, but investors shouldn’t read too much into it. Twitter CEO Dick Costolo told CNBC‘s Squawk on the Street they like running the micro-blogging platform as an independent company and they aren’t thinking of selling out to Google.
Twitter benefits greatly from Google deal
Twitter’s deal with Google is important because it makes Twitter’s site more searchable. It also increases the number of Twitter’s logged-out users by showing more people tweets—people who wouldn’t necessarily think of going to Twitter on their own. Instead of through advertising, it’s believed Twitter will make money from the deal through licensing fees. But however the micro-blogging company makes its money through the relationship with Google, it’s sure to boost its earnings results.
Of course this isn’t the first time Google has worked with Twitter. They had a deal that was similar to this new one in 2009 through 2011, but the two companies didn’t renew the deal when it expired in 2011.
No Twitter sale to Google
Ross Gerber of wealth management firm Gerber Kawasaki told CNBC that Twitter executives would do well to sell the business to Google right now. He advised them, “Get out of the business now while you’re at the top.”
Costolo told investors, however, that the partnership with Google is part of their broader “total audience strategy.” Management for the micro-blogging platform has emphasized repeatedly over the last several months that they want to monetize logged-out users, and this is just one part of their overall strategy to do it.
The importance of Twitter’s logged-out users
Wall Street has been disappointed repeatedly by Twitter’s slowing user growth, so monetizing those who visit Twitter but never log in is an important part of growing the platform’s user base. Costolo has been trying to refocus investors’ attention on logged-out users and away from the decelerating user growth. He promised a better future for the company, which appears to have stifled the criticism of him, at least for now.
As of this writing, shares of Twitter were up 15.44% to $47.64 per share.