Just a day before Twitter reports its earnings, it appears to have just signed a new deal with Google.
Twitter revolutionized what 140 characters can do, Google is the search leader and pioneer, together the two are working at making the former’s tweets searchable the moment they have been sent. Sometime in the next five months, because of the deal, Google will be given access to the Twitter ‘firehose” making new tweets appear in Google searches instantaneously. In the past, Google had to “crawl” through Twitter’s site and as a result caused delays.
Twitter CEO Costolo renews deal
Twitter and its investors have long worried about slow user growth, but Chief Executive Officer Dick Costolo believes he’s found a way to build Twitter’s audience and consequently its advertising revenue. Through the agreement, Google will now be given the same access as Microsoft’s Bing and Yahoo Search enjoy.
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The number of active Twitter users grew only percent in the third quarter, and only percent in the quarter before that.
According to unnamed sources, engineers from both companies have already begun work on this new integration which shouldn’t take too long given that the two had a simiilar arrangement that ran from 2009 to 2011. Unlike current Twitter CEO Dick Costolo who clearly sees the arrangement as mutually beneficial, Ali Rowghani, Twitter’s former COO chose not to renew the deal in an effort to better control the microblogging site’s content.
A healthy partnership
So far, neither Twitter or Google have responded to requests for comments from Bloomberg. However, Colin Sebastian, an analyst with Robert W Baird & Co., wrote in a note that he sees a healthy relationship “given Google’s desire for greater relevance on mobile and in real-time, and Twitter’s desire to extend reach and monetization.”
Continuing his note, Mr. Sebastian said it is also less likely that Google would acquire Twitter given this new relationship. It’s long been rumored that Google has its eyes and war chest poised for the acquisition.
It’s believed that their is data-licensing revenue in Twitter’s future from Google rather than the sharing of advertising revenue.
Ahead of earnings and following the news, Twitter is trading at $42.15 (11:07AM EDT) up over roughly $1.40 or 3.5 percent.