Friday, May 8, 2009

Of course Twitter isn’t for sale; who’d be dumb enough to buy it?

During an appearance Wednesday on ABC’s “The View,” Twitter co-founder Biz Stone declared that the micro-blogging and social networking service wasn’t for sale.
Media reports have had Apple, Google and Microsoft interested in buying Twitter, but those big companies have to be wary of overpaying for this year’s “next big thing,” which is likely to be next year’s big disappointment.
Asked about a possible acquisition of Twitter, Stone said, “We’re just getting started, as I’ve said. The company is two years old. We have so much to do, so much product stuff to fix, and so much growing to do.”
Asked point blank if Twitter was for sale, Stone said, “no.” (See Reuters story.)
That sounds like someone who isn’t getting any offers he considers worthwhile. Stone and other investors in Twitter are expecting a big payout like the heady days of the Web 1.0 bubble and the Web 2.0 frenzy.
Maybe Stone is holding out hopes of becoming the next Mark Cuban, who famously sold his money-losing Broadcast.com for $5.7 billion in April 1999 to Yahoo (suckers!).
Twitter already turned down a $500 million takeover bid last year from Facebook.
Big publicly traded companies have lost too much money on unprofitable Internet services in recent years not to have learned their lesson. In this new age of austerity, brought on by the Great Recession, companies don’t want to get burned by some value-destroying acquisition.
EBay lost boatloads of cash with its September 2005 purchase of Skype for $2.6 billion. Google bought YouTube in November 2006 for $1.65 billion and is losing money hand over fist with the video-sharing service.
Twitter has signed up millions of users, but it’s unclear how many of them are active. The San Francisco-based company also hasn’t figured out a way to generate revenue from the service. But it has figured out how to generate tons of hype.
Twitter has attracted a lot of press coverage, but an equal amount of ridicule. See “Twitter, like Skype, is overhyped” by TheDeal.com. Also check out Slate’s mockumentary about a company called Flutter that aims to take micro-blogging to the next level.
With all the jokes and mockery at Twitter’s expense, any company that buys the service now will be a laughing stock.

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