The Twitter Tug of War: Can Google Win?

Why Google may be looking to bash and buy Twitter at the same time.

ByABC News
September 11, 2008, 4:36 PM

March 6, 2009 — -- Here's a quiz for you.

Why did Google CEO Eric Schmidt make the following statement recently about Twitter and similar services: "I view all of these as sort of poor man's e-mail systems"?

a. He doesn't get it.
b. He not only gets it, but he's afraid of the threat posed by Twitter.
c. He's devaluing Twitter to position it for a possible Google acquisition.
d. All of the above.

Incredibly, despite the fact that some of these contradict each other, I believe the answer is (d). Here's my reasoning.

First of all, you have to understand that Eric Schmidt is one of the brightest people in the entire electronics industry. It is often forgotten that he began his career as a research scientist at legendary brainiac places like Bell Labs and Xerox PARC, then became chief scientist at Sun Microsystems (where he led the development of Java) and only then became a businessman.

In other words, Schmidt is really, really smart. And he's also very clever. Scary clever. And since he took over Google, Schmidt has also become quite shrewd, a real corporate chess player -- and when you talk with him you often feel that he is already several moves ahead.

So what do I mean when I say that Schmidt doesn't "get" Twitter? I mean that he probably doesn't get the gestalt of the technology, why it is so appealing -- indeed, addictive -- to millions of people.

When you think about it, that's understandable: He is not really a Twitter-type person. He's about to be 54 years old, and looking at a technology designed for 25-year-olds. Moreover, Twitter is a tool for people in the audience, not on stage -- and as the CEO of a Fortune 500 company, Schmidt is most definitely the man on the stage. He has no time to maintain a real-time diary on his day.

But if Schmidt doesn't get Twitter in his heart, he most certainly gets it in his head. Keep in mind what Google's real business is: It sells to advertisers the information created by traffic moving through its search engine.

The more traffic, the more revenues for Google. That's why Schmidt and the two founders have consistently said throughout the years that Google's long-term goal is to be the portal through which all of the world's information passes.

Now, along comes Twitter -- it is free, carries no obvious advertising and appears both innocent and unthreatening. Even the two founders, Biz Stone and Evan Williams, profess to having little immediate interest in monetizing the company, and only reluctantly take venture capital money.