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Twitter Just Became a Takeover Target for Google



Twitter Just Became a Takeover Target for Google

7-22-2016

Preface
While Alphabet Inc. (NASDAQ:GOOGL) may be the most valuable company in the world, accounting for difference in cash balances between it and Apple, there is one area that Twitter Inc. (NYSE:TWTR) is able to compete with Alphabet Inc. and that is real-time communiques. It's that unique space that Twitter holds that could have just now made the company a takeover target for Alphabet.

STORY
This is a fascinating side-by-side comparison and a reveal of how powerful Twitter Inc. has become in just the last month. With that power may have come an impetus for Alphabet Inc. to make the long awaited, or at least speculated, move to takeover Twitter.

REAL TIME COMMUNIQUES
Twitter Inc. is now famously known for its unique ability to deliver real time communiques. With a sack full of new live streaming deals ranging from the NFL, NBA, MLB, MLS and Wimbledon to Bloomberg TV and college athletics, Twitter Inc. has turned things around. But there is one example of a head-to-head comparison between Twitter Inc. and Alphabet Inc. that is "apples-to-apples," and we're not so sure Alphabet Inc. wins this one. It's that head-to-head competition that may have just made Twitter Inc. a target for a takeover.

THE ONE PLACE TWITTER CAN COMPETE WITH ALPHABET
Twitter Inc. announced a partnership to live steam the republican and democratic national conventions. That partnership delivered exactly what it reads like -- live footage of the conventions surrounded by live tweeting. It was a wonderful experience and just the beginning of the newly defend Twitter Inc. identity.

Here's what Alphabet Inc. did -- these are snippets directly from the official Google blog:


[F]or the kickoff of the Republican National Convention next week (and coming in time for the Democratic National Convention the following week), when you search for these events on the Google app, you'll find a summary of the event, nominees and the lineup of speakers."

You'll also find a livestream video from YouTube, and relevant social media posts, so you can stay up-to-date with both the political parties and the public.
Source: Official Google Blog

So there we have it, a direct and equivalent competition for the same event and the same technology that is live streaming. While almost any other comparison between these two companies would likely swing wildly in Alphabet Inc.'s favor, we must ask ourselves if that is the case with this event.

And, if this is a legitimate competition for Alphabet Inc. (NASDAQ:GOOGL) and its YouTube property for one live event, then perhaps Twitter Inc. (NYSE:TWTR) is now a legitimate competitor more broadly with the most powerful company in the world in this one area.

IS ALPHABET GOING TO TAKEOVER TWITTER
The next logical step when we see a side-by-side competition between two companies that are in fact cooperating on a large scale through Google search and Twitter's tweets, is to wonder if perhaps a takeover is due. While Twitter's CEO, Jack Dorsey, plainly said that Twitter Inc. was not looking for a buyer at the most recent Twitter shareholder meeting, that doesn't mean Alphabet Inc. isn't interested in a takeover.

In this case, it's a fair analytical question to pose, whether Alphabet Inc. is now more likely to make a bid to acquire Twitter Inc. (NYSE:TWTR) since the two are competing directly, as opposed to a friendlier coopetition. Given Facebook's dominance in the social media realm and Alphabet's failure with Google Plus, we could list dozens of reasons for a takeover.

For a Friday afternoon, an Alphabet Inc. takeover of Twitter Inc. is a fun place to let our minds go. It might also be a good place to do further research.

WHY THIS MATTERS
Twitter and Google generates nearly all of their business from advertising and they are both leading the way in the revolutionary new ad format that is online video which is growing so quickly that it will someday over take standard linear Television ads. It turns out that there is one technology company that will power this revolution, regardless of whether it's Facebook, Google, Twitter, or whomever that will end up with the largest audience.

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