Last week Dick Costolo announced he would be stepping down as CEO of Twitter. Costolo had held the CEO position since 2010. Co-founder (and former CEO) Jack Dorsey will fill in as interim CEO beginning July 1st.
Interestingly, a few months ago Twitter and Google announced a new partnership that would provide Google full access to Twitter’s stream. For Google, this partnership meant faster access to information (in the form of 9,000 tweets per second) from Twitter. For Twitter, this partnership meant increased exposure, which would hopefully result in higher revenue on advertising since the more people that visit the site, the better the chances of engagement with the ads.
The recent announcement about Dick Costolo’s resignation has spurred speculations about Google’s plans to buy Twitter for a couple of reasons:
- Twitter needs Google: Although Twitter has previously turned down offers from Google and Facebook with the intention of competing with them, Twitter has failed to figure out how to effectively monetize their site. Costolo was under some serious pressure and did not deliver.
- Google needs Twitter: Although there are more than 2.5 billion users on Google+ (technically making it the largest social network in the world), Google has never really quite figured out how to compete with Facebook or Twitter in terms of real engagement. The “user” number is a little deceiving because Google requires users of any of its other products (Gmail and YouTube, for example) to register for a Google+ account. As a result, there are many Google+ accounts out there where the “user” may never have had any intention of being an active participant on Google+. It is estimated that fewer than 10% of users on Google+ are active.
It appears that the timing may be right for both companies. Google is tired of sitting on the bench. They want in the game! And Twitter has never figured out how to make money playing the game. Could the two of them team up to effectively compete with Facebook? We shall see..
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