Twitter: Coming home to roost?

Alex Dixie in Advertising

in Advertising

With increasing media speculation that Twitter is soon to be snapped up, we at ADTEKR have considered the likely (and possibly less likely) contenders to own the tweet stream. With the vast amount of data which will be available to any future owner, the identity of the ultimately successful party is likely to be of great interest to the adtech sector.

What do you think? Do you agree with our view? Are there any other contenders you could see making a move for Twitter?

Google

Google is about consumption of data – the more data it can ingest, the more powerful its offerings become. Twitter provides a vast flow of real-time, user-generated data. 6,000 tweets per second or over 500 million tweets a day is a significant firehose for Google to tap into. With the recent licensing deal allowing Google access to Twitter feeds for displaying in its search results, Google is clearly interested and sees the power of the tweet in displaying new content as it happens. Very little on the internet is as immediate or as viral as Twitter.

With Google+ gradually being disconnected from Google’s other online estates and its head of development moving on to new challenges, perhaps now is the perfect time for Google to change direction and rather than attempt to organically grow its own social network from scratch, invest in a pre-existing platform with a well-established and loyal user base. Perhaps Google has learnt its lesson from Google+ and Orkut?

Rather than simply being a passive custodian of others’ content, Google clearly has ambitions to be the fount of all knowledge, including that generated by the average user. Twitter would allow Google to add yet another string to its bow – rather than simply “what have other people said previously”, Google would become the destination for “what are people saying right now”.

With its recent licence deal though, the question is whether Google has now managed to get the keys to the castle and tap the Twitter datastreams without needing to make the upfront investment of actually acquiring Twitter? If so, and this will very much depend upon the terms of the licensing deal and the data access actually granted to Google, perhaps Twitter has now become a less attractive proposition? Why would Google take the risk of investing $25bn when it can enjoy the upside at a much smaller licensing cost but avoid any baggage that may come with the company itself?

However, with Google’s warchest of $30bn, Twitter is very affordable.

Likelihood: 8/10

Yahoo!

Recent times have not been kind on Yahoo!. Once the king of the “portal”, user behaviour shifting away from single site homepages to easily accessible “new tab” pages on updated browsers such as Chrome, Safari, Firefox and even Internet Explorer have led to Yahoo! tumbling from its peak value of $140bn to a current value of $40bn. Clearly by no means a minnow, Yahoo! has been searching for its identity over the past years under Marissa Mayer; is it a content player? An advertising network? A portal page? One thing that does seem key to Yahoo! is that advertising-supported content in some form is the current driving force.

Would Twitter be a good fit? Arguably, yes. Purchasing a platform such as Twitter would provide Yahoo! with a focal point to use as its core product offering going forward, using the platform as a popular, central pillar to upsell other Yahoo! products whilst also generating revenue by unlocking the power of promoted tweets and similar products to the still wide-ranging Yahoo! advertising network.

Yahoo! is also currently sitting on $5bn realised from the sale of its stake in Alibaba – a nice chunk of the $25bn that Twitter is currently valued at. Could this be a final throw of the dice by Yahoo!? Or would this be just too much of a stretch to convince investors that it would be a wise purchase?

Likelihood: 5/10

Apple

Having played on the fringes of social networking, Apple has yet to launch full steam into this space (we’ll ignore the flop that was iTunes Ping). With recent acquisitions such as Beats Audio, Apple has shown it is willing to spend on companies with existing reputations to gain user base.

Why would Apple want a presence in this sector? Simple – an audience of 300 million active users, mostly fitting into the 16-35 year old, technophile space. Although supported by a huge marketing budget, a lot of Apple advertising is undertaken by word of mouth via its legions of passionate supporters. Twitter would give Apple an immediate platform to directly access these followers. Apple has always been a proponent of Twitter – back in 2011, the first social network with deep integration directly into iOS was Twitter, not Facebook.

Apple has an audience clamouring for a platform; and of all the companies mentioned in this post, an Apple purchase would arguably be least likely to cause wide-spread disruption of the current Twitter user-base. The challenge to Apple will be if it were to consider attempting to make Twitter iOS/OS X only – the success of Twitter to date has been due to its open nature; any attempt to create a walled-garden would be the antithesis of everything which Twitter stands for. Apple has often looked to close down environments, however, and keep other platforms out – would Twitter therefore really be a platform which Apple would be willing to leave open?

However, something about the elegant simplicity of distilling an idea, a concept, a thought into a minimalist 140 character tweet does feel very Apple-esque.

Likelihood: 7/10

Facebook

Still representing the main alternative to Facebook, Twitter has often been the subject of takeover rumours by the social giant. The whispers have yet to materialise into anything concrete, however.

The key selling point for Twitter for Facebook is obvious – 300 million active users, 80% on mobile with many of these users in staunch opposition to the more-is-more culture of Facebook. Bringing these users into the Facebook fold but continuing to offer the same minimalistic Twitter service simply increases Facebook’s user (and associated data) pool. As Facebook increasingly moves to combat the advertising might of Google, it faces the same challenges of ingesting enough data to provide a competitive advantage. A new data stream the size of Twitter can only help to enhance Facebook’s targeted advertising offering – and unlike Google, it is highly unlike to sign a licensing deal with its arch competitor to access this data without a takeover.

Facebook and Twitter still represent two different use cases for users – ask the majority of people on the street and most will use Facebook to share more personal content with a smaller group of contacts but use Twitter for more public broadcasting and also for consuming information such as news stories in real-time.
Twitter and Facebook owned Instagram also seem to be natural bedfellows – one to create new content, the other to share it with the world.

Finally, there is always the chance that Facebook will hear rumours of competitors such as talk of Google sniffing around Twitter and instead make a pre-emptive, defensive acquisition.

Likelihood: 5/10

LinkedIn

Speak to businesses today and they will generally say that in terms of their social activity, they see their main channels as being Twitter and LinkedIn (despite the claims of Facebook). Given this, the question has to be asked whether LinkedIn would be a good match for Twitter? LinkedIn clearly excels at creating a space for businesses and business users to create their corporate identity, away from their non-professional life. However, the social element of LinkedIn can sometimes be lacking. This is where Twitter could really act to bolster LinkedIn’s offering – real-time, social networking. A “Twitter for Business” product which linked to a LinkedIn profile and provided a corporate platform for tweeting but also additional features such as a proper customer support service could play to both Twitter and LinkedIn’s strengths.

However, with a similar valuation to Twitter and much lower cash reserves than the alternative players here, are LinkedIn really big enough to make a serious play?

Likelihood: 2/10

Microsoft

Back in the early 2000s, Microsoft ran the largest social network on the planet – MSN Messenger. The world has moved a long way since then and Microsoft no longer has one of its core offering in the social networking space. Yes, So.cl is still running and offers a good service to augment other social networks and of course Yammer is a strong enterprise offering. However, given the shift by Microsoft to being a services company, a social platform for the masses would appear to be a worthy addition to Microsoft’s offering.

With the ability to deeply integrate a social offering into Windows across all platforms (particularly with Windows 10 on the way), a Twitter acquisition could be a good way for Microsoft to step in to a ready-made product with large user base. With its Bing ad network, Microsoft also has great reach ready to make use of the insights provided by its analysis of the data flows from a platform such as Twitter. And Microsoft is definitely no slouch when it comes to data analytics.

With its recent acquisitions of Accompli and Sunrise, Microsoft is clearly looking outside the box and has made moves that demonstrate it is now looking differently at M&A. If bids do start coming for Twitter, expect Microsoft at the very least to be in the running – the question remains, how much would Microsoft be willing to spend to prevent Google or Facebook stretching ahead in terms of pure data assets?

With a $90bn war chest at its disposal, price would not be an issue.

Likelihood: 6/10

Samsung

With its phones and other hardware struggling against cheaper Chinese android devices at one end of the market and high-end iOS devices from Apple squeezing sales at the other, Samsung is in a difficult place. Samsung needs to stay relevant and reach and educate a target audience who will become its brand ambassadors– something Apple does incredibly well. As with Apple, above, Samsung’s target audience matches surprisingly well with Twitter (16-35 technophiles). Twitter is a great platform for Samsung to push its products. At the moment, it is in clear need of a key differentiator to stand out from the crowd, in the android market in particular. Could Twitter provide a USP which other manufacturers simply cannot offer? Is this an opportunity for Samsung to prove that it is still current?

Of course, Samsung also creates thousands of other products and particularly notably, TVs. With Twitter real-estate including social video broadcasting leaders Periscope and Vine – is there maybe a match-up here? As smart televisions shift broadcasting leadership from traditional networks to user generated content, could Samsung steal a march on its competitors by buying not only the UGC content creators but also their key distribution platform?

Likelihood: 4/10
Twitter: Coming home to roost? was last modified: May 27th, 2015 by Alex Dixie