The Twitter Tug of War: Can Google Win?

Most of all, for someone who obsessed for 20 years on how to defeat Microsoft … and then did so by concealing a powerful business engine behind a cute, free and very useful technology … he certainly recognizes that Twitter now is busily applying the same strategy against him.

For all of those reasons, Schmidt may have decided he wants Twitter inside the Google tent, just as he did when YouTube exploded and threatened to create another non-Google data cache. And he's certainly not alone. Over at Facebook this week, Mark Zuckerberg introduced a new Twitter-type feature on that service's home page.

We know that Facebook already tried to buy Twitter, but was rebuffed (reportedly over the price). So, Zuckerberg has apparently decided to pursue the old Microsoft bundling strategy of defeating a competitor by selling its own version as a new feature to its millions of users.

Remember, when Bill Gates tried this strategy, Microsoft was labeled as the Evil Empire and was hauled in front of the Justice Department. And Facebook already has a sullied reputation for fast and loose business practices (like the sudden change to its "terms of service" last month, which you can read about in my column here.)

Google's Future: Buying Twitter or Competing With It?

But if Facebook is taking a risk trying to move into Twitter's market, isn't Google taking an even bigger one? You bet, but that could be one of the reasons that Google had such a presence at the Democratic National Convention and has been all lovey-dovey with the Obama administration. I told you that Schmidt thinks several moves ahead, and if Google does have designs on Twitter, it certainly would help to have a pliant White House not asking too many questions.

So that brings us to (c). If Google really does want Twitter, what does it hurt to talk the company down? Ev and Biz haven't taken Schmidt's comments personally and, certainly, there is nothing in his words that would kill a deal. On the other hand, it could knock a little off the acquisition price by showing that Google isn't desperate to make a deal. And if Google has its own Twitter-killer application hiding in one of its skunk works, it can't hurt to minimize Twitter's appeal to potential users until Google is ready for its own unveiling.

If this all sounds absurdly convoluted, welcome to the world of billion-dollar, high-tech companies. And the real question is not whether Schmidt can hold contradictory thoughts in his mind -- he can -- but whether this scheme will work.

We'll know the answer very soon, I think.

This is the opinion of the columnist and in no way reflects the opinion of ABC News.