So, TechCrunch is spreading rumors and speculation about a Twitter-Google deal.

If you believe in the theory where there’s smoke, there’s fire, a deal may, in fact, be happening…or not given how TechCrunch is getting conflicting reports on the state of discussions between Twitter and Google.

Now, if you’re a conspiracy theorist or someone who looks at business fundamentals, here’s why I think Twitter may be in play:

Despite all the bravado from Twitter and its venture capital investors about new revenue streams being launched in the coming months, it may just be that Twitter isn’t much of a business. It could be that the millions of users can’t be leveraged into millions of dollars of revenue. Twitter built it, they came but no one (users, advertisers, partners) wants to pay for it.

If Twitter doesn’t have a viable business model but lots of users, then it needs to find a suitor who has a business and wants a lot more users. This is where Google comes into play.

Twitter is a lot more interesting to Google now than it was six months ago because Twitter has emerged as an increasingly interesting search engine, providing real-time insight into what people are talking about and thinking.

As Google looks for new ways to expand its search dominance, it becomes more logical to consider the acquisition of Twitter.

If you combine this strategic need with Twitter’s lack of a viable business model, a Google-Twitter deal makes a lot of sense.

Technorati Tags: google, twitter