NEW YORK – Popular micro blogging outfit Twitter certain stands to lose its clout — and money — if it flubs its social search deal with Microsoft’s Bing like it did with Google. Earlier this month, search engine titan Google canceled its real-time search deal with Twitter, as the micro-blogging leader is now treading shaky waters in an ongoing negotiations with Microsoft over a similar use arrangement.
Barely few weeks after Google withdrew its tweet-parsing social search function, AllThingsD is reporting that Microsoft is also musing to cancel its contract between Twitter and Bing, leaving the micro blogging service without its very lucrative nest within traditional search engines.
The deal expires later this year, and according to AllThingsD, after failing to strike an agreement to renew its “fire-hose” data stream licensing deal with Google, Microsoft and Twitter are renegotiating their deal that lets Bing suck data from Twitter’s real-time feed “fire-hose”.
Twitter is now moving cautiously to make sure the same thing does not happen to a similar arrangement with Microsoft’s Bing search service, said sources close to the situation. Next time, Twitter wants to double its license fee to $30 million a year.
Microsoft apparently is not worried about that — $30 million is still chump change to a business unit that loses $3 billion a year.
According to AllThingsD’s Liz Gannes, there are a few core points over which the two companies are currently discussing. But, if successfully negotiated, Microsoft could ultimately land the keys to the real-time kingdom: long-term access to the real-time updates provided by both Facebook and Twitter, which would accompany the site’s standard search results.
The end result could mean a lot to both Twitter and Bing. But surely, without a deal, the San Francisco micro blogging service would be without two major paid proponents for its full live stream of user tweets, a significant source of its revenue to date.
However, Microsoft’s Bing–which is waging an expensive battle in a search arena monopolized by Google–has the opportunity to be the only major search player with extensive access to social media data from both Facebook and Twitter.
Considerably, that sounds like a lot, but Gannes adds that it is actually one of the “less contentious” parts of the negotiations. According to several sources, the duo are still far apart on a number of issues, the two sides also have yet to come to terms on issues including the price and term of the data licensing, the way the tweets and advertising: Specifically, how both companies will split revenue for advertising that appears in conjunction with Twitter information and even how much traffic Bing pushes back to Twitter.
Furthermore, the two companies have six extra months to negotiate the details — Twitter signed real-time search contracts with Google and Microsoft in the fall of 2009, but Microsoft got a slightly longer timeframe than its biggest competitor. Twitter is allegedly asking for an increased licensing fee for use of its real-time information: $30 million, or double the cost of the company’s original contract with Microsoft.
Nevertheless, Twitter might already have the established user base, still there are too many aspiring competitors on the social media landscape for Twitter to be making enemies, and if Bing bails on social search and Google decides not to come back, well, social search essentially ceases to exist.