Would Or Should Google Buy Twitter?

The rumors about Google being interested in buying Twitter have reared their ugly head again, and once again, Twitter shares edged upward on reports of the rumor. But would, could or should Google buy Twitter?

Google has enough cash, but…

This time the rumor came from a report on Briefing.com. Samuel Gibbs of The Guardian notes that Twitter’s market capitalization is now about $34 billion, but Google could still gobble up the micro-blogging platform if it really wanted to. In 2009, there were reports that Google was in talks with Twitter about acquiring it then for about $250 million. What a difference a few years can make in terms of a company’s valuation.

A lot has changed since 2009 though, as Twitter now has more than $1 billion in revenue and 288 million monthly active users, not counting logged-out users. Twitter also hosts about 500 million tweets per day, and 80% of its users are tweeting on mobile devices, which is important for the social networking sector because mobile is becoming increasingly important as desktop use declines.

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What would it take for Google to acquire Twitter now?

Because of Twitter’s growth, Twitter would have to shell out about $50 billion in order to offer a reasonably sized premium over the micro-blogging platform’s market cap. However, it would take such a huge bite out of Google’s $60 billion in cash that it seems unlikely the search giant would do it.

Also a significant portion of Google’s cash isn’t domestic, which would make it very difficult to complete such a sizeable transaction. However, Google could make the deal if it really wanted to using a combination of cash and stock.

A Google – Twitter partnership instead?

But it seems unlikely that the company cares enough about social networking to be interested in paying so much for Twitter, particularly since it no longer plays up its own social network, Google+.

So just as every time the rumors about Google trying to buy Twitter pop up, it appears that this one is a wash as well. It just doesn’t make a whole lot of sense for Google to try to buy Twitter. The search giant would probably be better off dropping some money on YouTube, as video ads are becoming increasingly important in terms of stealing market share from TV.

And perhaps a partnership between YouTube and Twitter might make more sense, as bringing the two together could create a lucrative and united front to go head to head with leader Facebook.

As of this writing, shares of Twitter were down 0.83% to $52.43 per share.