Google To Buy Twitter, Results In Rise Of Stock Price Of Twitter
Similar to earlier takeover attempts, rumors about Twitter’s buyout by Google quickly escalated the social network’s stock price by 4% this Tuesday. Reports of Twitter using assistance from Goldman Sachs to repel takeover bids gave rise to such rumors.
Acquisition attempts by Google date back to 2009 when the company did advance in negotiations to get control of Twitter for approximately $250m resulting in nothing but speculation. Following that, in 2011 rumors about Google, Facebook and several other tech giants’ interest in Twitter takeover were also heard across all places. $10 billion was the estimated price tag of that speculative takeover.
However it was for the first time in 2013, when such rumors actually had affected Twitter’s stock rate. A 3.3% increase in share price only due to speculation was a good break for Twitter.
But presently, the reason why Twitter acquittal look so enticing is because it’s valued between 33 to 34 billion dollars. Twitter’s revenue generation goes beyond $1 billion with over 288 million active users – mostly on smartphones – the social networking website offers an attractive advertising forum.
Now, due to the current acquittal rumors if Google has serious plans for the buyout, the company would be expected to pay around $50 billion, much more before the 4.4% increase. Still it wouldn’t be a big deal for them as they (Google) have finances in the range of over $60 billion.
Nevertheless it’s not just simply paying $60 billion and getting full control of Twitter, because tax amount will have to be added. And that would surely impact Google’s buying power.
But just like the way Facebook dealt with its acquisitions, Google is also not bound to just buying with cash. Rather seal the deal with a mixture of cash and stock. As the search engine currently values at over $360 billion, they are likely to deal with the takeover with a lot of thought and tactic.
The tech world is still unable to comprehend if:
a) the takeover is possible, and b) if it is really going to reinforce Google’s stance on social networking.
Looking at the status quo, we observe Google’s decreasing promos for Google+, ranked as the second largest social network of 2013. Taking out Google Photos as part of Google+ and dropping authorship profiles from search are some of the steps which makes everyone question if the Twitter acquisition is likely to take place in the near future.
Computer Science student with interests in latest trends in technology, latest news about tech companies, startups, smartphones and football!