Twitter Inc. (NYSE:TWTR) is probably the most-ridiculed stock in the market now as it its ship continues to sink. On Monday, the stock crashed by 5.6% to a $29.27 trading price to mark the lowest price since its IPO in November 2013. The decline slashed Twitter’s market value below $20B. The stock recorded a respite yesterday to gain 0.26% to $29.34 after Facebook’s Sheryl Sandberg was rumored as a CEO pick. The uptrend didn’t live to see the light of day as the stock declined another 0.19% to $29.29 in after-hours trading.
The firm now has a market cap of $19.17B despite even yesterday’s 0.26% gains. The drop in the market value of Twitter has made the stock an attractive takeover target and the rumor mill is once again alive with permutations on who should buy Twitter. That Twitter is becoming a takeover target is not news; even its fiercest advocate, Jim Cramer says a buyout in in sight. Perhaps it won’t be out of place to provide three reasons Google Inc (NASDAQ:GOOGL) should buy Twitter.
Google Has Not Succeeded in Social
Google (NYSE:TWTR) for all its talent pool, resources, and market share hasn’t been able to succeed in the social network/media space. Its Google+ service pales beside the likes of Facebook, Twitter, Instagram or even LinkedIn. In fact, Google has started what could be seen as a stylish axing of Google+ by unbundling the popular services such as YouTube that were previously tied to Google+.
If Google buys Twitter with its 304M active users, it would have a ready -made audience that could be the launchpad for unlocking growth in the social network space. A Twitter-YouTube synergy could be instrumental in snatching away significant market share from Facebook.
More so, Google has the deep pockets to fund growth strategies. Hence, a Twitter within the Google ecosystem will be able to focus on growth without having to worry about bottom line.
Google Needs Twitter’s Mobile and Native Content for Ad Revenue
Google for all its strength and resources has not been able to key into mobile and native content space, as one would have expected. Other than its Android OS, Google doesn’t have serious assets in the mobile space. In contrast, Facebook has a bevy of mobile assets including, Messenger, WhatsApp and Instagram.
If Google buys Twitter (NYSE:TWTR) , it would have a viable mobile asset that could be repositioned for optimal mobile ad revenues. The best part is that Twitter has a unique niche in user-generated content; hence, Google will spend less in content-buying costs if it owns Twitter.
Google Loves Fixing Problems
Twitter has a problem and the whole world knows it. The platform sounds great on paper but everyone is left wondering why it can’t seem to catch up with Facebook after all these years. The main problem with Twitter is that it a fantastic platform for existing users but quite overwhelming for newbies.
Twitter will continue to battle growth issues until it is able to make itself less daunting. Google has a culture that loves fixing problems and it would derive a lot of humblebrag from fixing Twitter (NYSE:TWTR) .