Microsoft Will Buy Twitter, Adobe to Buy Picnik, and Other Bold Predictions for 2010

11/19/09Follow @gthuang

It wasn’t so much the predictions as the discussion that was most interesting at last night’s annual predictions dinner, organized by the Washington Technology Industry Association. Will Twitter be acquired in 2010, and why? Who will have the dominant cloud computing platform in the next couple of years? What kind of startup are you looking to build or finance, and which areas are you staying away from?

A panel of Seattle-area tech entrepreneurs and investors gamely took the bait and had some lively exchanges over the course of an hour. OK, these guys all know each other, and we’ll take what they say with a grain of salt since it’s a public forum—but here were some of the most interesting points they made. (You can read more comprehensive recaps of the panel on Brier Dudley’s blog at the Seattle Times, and soon on TechFlash by moderator John Cook.)

The panel was split 3 to 2, with the narrow majority guessing Twitter will get bought next year. Andy Sack of seed-stage fund Founder’s Co-op predicted Twitter will make more money than Facebook in 2010 (surprising, given the current disparity in the other direction). Glenn Kelman, the CEO of Redfin, an online real estate firm, said Twitter should charge for search (as it has begun to do in partnerships with Google and Bing). Kelly Smith from Curious Office and the startup Pressplane argued that Twitter could be “absorbed by a big company,” but “it’s going to go nowhere.” By the end of the evening, Sack was predicting that Microsoft would buy Twitter next year.

There was a consensus that 2010 could be a big year for acquisitions. Bill Bryant of Draper Fisher Jurvetson boldly predicted that Amazon will buy Netflix, Blockbuster, and Hulu, while opening brick and mortar “Amazon media stores.” Greg Gottesman from Madrona Venture Group said Cisco might buy EMC (for VMware) and Seattle-based F5 Networks, while Microsoft might buy Research In Motion, the maker of the BlackBerry smartphone. Sack predicted Adobe would pick up Seattle photo-editing startup Picnik. Rupert Murdoch (News Corp.) would buy Seattle’s Cheezburger Network, and someone would buy Redfin.

Looking back on 2009 for a minute, the big deals that were questioned by the panel included Adobe’s acquisition of Omniture (Gottesman said it just didn’t make sense strategically) and Amazon’s purchase of Zappos (Kelman wondered why Amazon would pay as much as $1 billion).

As for cloud computing, Kelman thought Google would have the dominant platform within two years, because the company is built to provide that kind of huge-scale infrastructure. Smith disagreed, saying Google would compete on price, Amazon on features and flexibility, and Microsoft on big enterprises and users of Windows and Microsoft databases. Bryant pointed out that IBM, HP, Apple, and VMware will be catching up quickly. Interestingly, nobody seemed to think Amazon (the current leader) would stay ahead of the pack.

The panelists went back to their startup roots to discuss the best opportunities for tech entrepreneurs. Smith said he’d look to create an online music creation site, like ProTools for consumers. Sack would look at what he calls “PR 2.0″ using social media, lead generation, and healthcare. Gottesman would pay attention to location-based entertainment—products that combine virtual reality and mobile. Kelman said he’d buy a newspaper, crowdsource content with the aid of professional writers, and go into each local community or city with $100,000 (good luck). Bryant mentioned augmented reality combined with location-based services.

The startup areas they’re all avoiding? New social networks, iPhone apps (by itself), and video management.

It was particularly telling for our region that none of the panelists even mentioned cleantech (or energy-IT) until Denis Du Bois, from MIT Enterprise Forum Northwest and P5 Group, a marketing firm for sustainable energy, raised the topic. The panel agreed we might all benefit from thinking about how to replace entities like Exxon, the biggest company in the world.

And finally, Andy Sack gave my New England Patriots the kiss of death by predicting they’d win the Super Bowl this season. I probably shouldn’t have even published that.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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