Tuesday, May 3, 2011
Twitter Reported Ready To Buy TweetDeck Client
As its ad revenue grows, Twitter is reported ready to buy its leading client application, TweetDeck, for $40 million to $50 million. TweetDeck, which was originally used only for Twitter, now integrates with Facebook, LinkedIn, Google Buzz, foursquare and MySpace. With advertising likely to be displayed on TweetDeck, the deal benefits both.
Social-media giant Twitter is said to be ready to acquire client application TweetDeck in a deal estimated to be worth $40 million to $50 million. The deal reportedly includes cash as well as Twitter stock. A source told Reuters the deal would close within 10 days.
TweetDeck, first released in 2008, allows users to consolidate different accounts into handy columns based on topics, mentions or all friends. Initially intended for Twitter only, it now allows integration with Facebook, LinkedIn, Google Buzz, foursquare and MySpace. In an age of multiple log-ins and constant, simultaneous communication, the application, based on the Adobe Integrated Runtime environment Relevant Products/Services, saves the trouble of opening and closing, or minimizing, multiple browser windows. It also allows automatic URL shortening, a time-saving feature that allows quick links within the 140 characters allowed in a tweet.
Growing Revenue Seen
Twitter's ad revenue was estimated by eMarketer at $45 million last year, but that number could climb to $250 million by 2012, including $25 million in foreign income, the marketing-analysis firm said. Initially funded only by venture capital, Twitter is believed to be headed toward profitability.
"If Twitter is to develop income, they likely will need to control the leading client into the service, which will probably be where many, if not most, of the ads will be displayed," said technology consultant and analyst Rob Enderle of the Enderle Group. "Separately, if TweetDeck got ad revenue, Twitter would be motivated to block or displace it and, if Twitter fails, both fail anyway."
That makes it crucial for the success of both, Enderle said, to "align their interests and assure that competition between them doesn't kill both. "
TweetDeck had been mulling an earlier offer from UberMedia in a range reported at $20 million to $30 million, but began talking with Twitter last month, reports said. Twitter and UberMedia have a complicated relationship, with the company developing several apps that feed millions of messages to Twitter, but there have been rumors that UberMedia wants to start its own social network Relevant Products/Services, perhaps without a 140-character limit. Twitter may have thus seen it as strategically important to keep TweetDeck out of UberMedia's hands, even if it means shutting it down.
"It's a game of resource acquisition [that] got more interesting for Twitter when [TweetDeck CEO] Bill Gross got involved in the bidding," said analyst Michael Gartenberg of Gartner Relevant Products/Services Research.
The deal, if it happens, comes at a time when Twitter's fortunes are rising as it continues to play a role in world events. A man in Pakistan provided Tweets heard around the world as he listened to a fracas that turned out to be the U.S. Navy Seals raid on the compound where terrorist Osama bin Laden was hiding. And Twitter hit a new record of 5,106 Tweets per second as President Barack Obama announced Osama's death.
Twitter users also played a role in organizing protests that led to the ouster of Egyptian President Hosni Mubarak in January.