In a bid to significantly boost ad revenues, Twitter (NYSE:TWTR) joined forces with online search giant Google (NASDAQ:GOOGL). As stated in Google’s blog post, the companies have signed a deal to display tweets on Google Search through any browser on phone or tablet. Initially, the tweets will be made available on Google.com in English in the Google app available on Android-based and Apple’s (NASDAQ:AAPL) iOS smartphones in the U.S.
This is not just a win-win situation for Twitter and Google as users will also be largely benefited by receiving real time information on trending topics without having to sign into Twitter. By simply adding “twitter” to the search topic, users will find the related tweets on the Google Search page. Twitter’s latest strategy to promote its business not only targets the existing users but also reaches out to a large audience, without a Twitter account.
This isn’t the first time that the Zacks Rank #3 (Hold) company’s feeds have appeared on Google Search. A similar deal was signed between the companies in Oct 2009, which expired in Jul 2011. While it is still not clear why such a yielding collaboration came to an end, Twitter continued to maintain its relationship with other search engines such as Yahoo! (NASDAQ:YHOO), NTT DOCOMO Inc (NYSE:DCM), Yahoo! Japan and other smaller developers. Apparently, the main reason for the fallout was Google’s emerging social networking project — Google Plus. Back then, Google was ambitious about Google Plus after a failed attempt with Orkut and considered Twitter a competitor.
However, with changing market environment and fierce competition from the social networking giant Facebook (NASDAQ:FB), both the companies have come to reconsider their decision. Facebook is trying to creep into Google’s domain with its own search engine (read more here. It was not until the beginning of this year that Twitter and Google realized that combining their forces will help capture a large share of ad revenues. According to eMarketer, Google lost mobile ad market share last year, which dropped to 38.2% from 46% in 2013. The tech giant is losing out to Facebook, in particular, given its absence on social platforms. Hence, with the new deal, Google can boost business over mobile platforms, attracting more advertisers and raking in higher ad revenues.
Twitter will now be able to generate ad revenues from clicks on Google search, which would display live Twitter stream and lower its dependence on Twitter users. Twitter expects to diversify its revenue stream and increase sales from $665 million in 2013 to $14 billion by 2024. However, it currently has only 60,000 advertisers as against Facebook's 1.5 million, according to reports. As a result, it plans to increase the share of ads that appear on users’ timelines to 5%.