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Twitter takeover rumors are back

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Twitter takeover rumors are back

Twitter’s the talk of the town – on Wall Street at least. The social media company added more than $1 billion to its market cap on Tuesday after chatter that Google might launch a takeover bid. Two companies have approached Twitter with “serious” interest, according to a report which identified Google as one of the two. Twitter has reportedly hired Goldman Sachs as an adviser to spurn the advances. Twitter spokesman Jim Prosser declined to comment. Goldman Sachs spokesman Michael DuVally also declined to comment. Google did not respond to a request for comment. So is this a case of Wall Street rumor mongering run amok or is #Twoogle a real possibility?twitterhq

“I think it’s reasonable to say there are a lot of reasons why Twitter would have appeal to different potential acquirers for different reasons,” said Pivotal Research Group analyst Brian Wieser. “But there is no reason to believe at this particular time that there is anything to it that is meaningful.” Fueling skepticism: Any company buying Twitter would have to pay a significant premium on top of Twitter’s $34 billion plus market cap.

Google would be one of those candidates with enough cash. It has a $60 billion cash pile and analysts note it has struggled in social media against Facebook. It launched its own social network Google+ in 2011 but that effort never gained the kind of traction with the public that Facebook has. “Google is really pretty much getting killed in the social category. Who uses Google+? That’s pretty much dead,” Dan Niles, senior portfolio manager at Alphaone Capital, said on CNBC’s Halftime Report on Tuesday.

After shorting Twitter for years, Niles said he recently bought shares. The reason? Twitter’s search deal with Google which shows tweets in real-time search results. “If you’re sort of Google or somebody else who’s trying to get your growth reinvigorated, Twitter is obviously somebody that you can look at,” Niles said. Twitter shares popped as much as 5% on Tuesday before closing up 4% to $52.87 on heavy trading volume. Google’s class C shares closed up slightly to $537.02.

In other Twitter news, the company overhauled its “Quote Tweet” button on Monday to let users add up to 116 characters to a post. How it works: Instead of quoting a tweet as text, the button now embeds the tweet. The feature is initially rolling out to iPhone and Web users but is also coming to Android.