I agree wholeheartedly with this post by Henry Blodget, suggesting that Google should buy Twitter.
He says nearly everything I’d say. I’ll only add that:
1. My “Twitter + payments” thesis would flourish at Google, and help Google Checkout compete against Paypal.
2. Google’s biggest asset is searching all of the history of the web; their achillies heel in search (if they have one) is most likely the “real time” element that Twitter provides and is land-grabbing right now.
3. I don’t think Twitter would sell for only $1 billion. After a first quarter of 2009 as good as theirs, they are going to over value themselves, and if $1 billion makes sense to Henry — even though they’ve more than tripled in size after receiving an offer half the size — then their strike point in this deal is likely much closer to $2 billion.