Rumors emerged Tuesday that Twitter (TWTR) could be bought by Google (GOOGL). Twitter shares jumped 4% yesterday on the news, though they've settled down a bit this morning.
Is a deal possible? Sure.
Google is nowhere in mobile. It doesn't have a messaging solution. It doesn't have a popular app like Instagram. Google Plus went nowhere as a social network. Ad dollars are going away from search in favor of Facebook (FB) and Twitter. Of course it makes sense, theoretically, that Google would be interested in Twitter. But it just won't happen. I don't think Twitter will sell itself.
I heard speculation yesterday that Twitter could be bought for $60 billion by Google, roughly double its market value. Twitter's board would have a fiduciary duty to look at any offer, of course. And that price would be a nice premium above Twitter's all-time highs in the $70s. But it still doesn't mean it's going to happen.
The question is will Twitter's co-founders want to sell if offered $60 billion, $80 billion or even $100 billion. I just don't think so.
That's a lot of money but let's face it, all the co-founders are already set for life. They have more than enough money. So, what's still in front of them? Their legacy. I believe that each of them think that Twitter has too much potential ahead to cash in all the chips now for Google's money.
Twitter is a company that no one gave a chance in the early days. All the big Web companies, including Google, could have bought it for a song years ago. They all passed. They thought Twitter was either unsustainable, easily copied or a basket case of internal management problems. They were wrong -- and Twitter's co-founders will never forget that.
When I look at Twitter's future, I see enormous potential. What's the value of Twitter's "@" handle? It's like having its own television channel -- it's priceless.
So Twitter is worth about $30 billion today. The question is what can it be worth in five, 10 or 15 years. The answer is none of us knows. If Facebook is worth $200 billion today, it doesn't seem so farfetched to think Twitter could be worth the same, if not more, in the future.
Is it pre-ordained? No. But there's a very good chance with the current momentum. Revenue chief Adam Bain has always been a rock star. Kevin Weil is doing a fantastic job with products, having just launched Periscope to great acclaim and killing competitor Meerkat in a matter of days.
Give this wine a little time to breathe -- Twitter's co-founders will.