• Silicon Alley Insider, Wednesday, May 6, 2009 11:15 AM

Silicon Alley Insider's Nicholas Carlson offers five reasons why Microsoft, which is sitting on a pile of cash, should offer "whatever it takes" to buy Twitter. Most estimates peg the microblogging site's value at between $700 million and $1 billion.

For starters, Carlson says that Twitter has created a new and exciting type of search-real-time search, whereas Microsoft search (now called Live Search) has been a total flop. A Yahoo deal, which now looks likely, would certainly help, but it won't grow the way that Twitter is growing, Carlson says, but he warns that integrating Twitter into Live Search would be a bad idea, as Microsoft needs a place that people actually go to search. Lastly, Carlson says that Twitter will soon become that much more expensive, as soon as it taps its revenue potential.

Meanwhile, Kara Swisher reports that Microsoft's business development team is currently trying to find a valuation for Twitter. The bad news for Microsoft is that it will likely have to significantly overpay to acquire the microblogging service, as any offer from Microsoft can be easily matched by Google, which is also sitting on a pile of cash.

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