It’s funny, last night I had dinner with Matt Cutts, Google’s best known blogger. He said Google wasn’t buying Twitter as far as he knew, but I figured that Matt might not know whether discussions were happening or not so I didn’t report that to see what else fell out on the blogs after Arrington reported a rumor that Twitter was in discussions. After all, if you don’t want the world to know something you shouldn’t tell your #1 blogger. But now Kara Swisher is reporting that there is no Google deal under discussion to buy Twitter. Kara knows Google very well. Her partner is an executive at Google. So, I’ll go with Kara.

So, why would a rumor get started in first place? Well, Twitter might want to shake buyers out of the tree. Or, someone at Google might want to buy Twitter and is trying to get internal support built up for such an idea. Who knows?

For now, I’m going with Kara. I didn’t believe this deal from the beginning and said so over on friendfeed when I first heard about it.

UPDATE: I didn’t mean to imply that Kara got this info from her partner, see her disclosure. I included that info to demonstrate she knows Google very well and has tons of sources.

Yes, Twitter is in talks to be bought by Google, but is that the worst thing that would happen to Twitter?

No, even though it’s funny to note that designer Douglas Bowman just left Google a week ago to go to work for Twitter (and did so with a public “I’m pissed and I’m leaving” letter — I guess he’ll be asked to clean toilets for a few weeks if he gets bought back into Google).

Remember, Google is the company that bought Jaiku and then did nothing with it. It’s the company that bought Dodgeball (a company that had a service very similar to Twitter that was out before Twitter). And did nothing with it (the founders of that company also wrote a “we’re leaving” letter to Google.)

Are you noticing a trend here yet? Google sucks at microblogging/social networking and I don’t believe that Google has actually changed at all. The best predictor of future results is past behavior.

So, if Twitter goes to Google there’s a great chance that it’ll be screwed up.

But, there’s something even worse awaiting it: if Twitter gets purchased by Microsoft. Or worse, Adobe or Oracle or IBM.

Why? These companies understand even less of what’s going on in the social networking space than Google does. At least Google is trying and failing. But Google makes great mobile apps and Google understands how to scale things that need scale. I can also see how Google would integrate Twitter search into its search pages.

Microsoft, on the other hand, doesn’t deserve to get Twitter. Microsoft has totally screwed up its online branding and search. It’s pretty incompetent in those areas and has been for years. Yeah, I know that Microsoft has thousands of employees who’ll call me names on their blogs and yeah I know that Microsoft has thousands of fans, er, MVPs, who’ll tell you at length why I’m wrong.

But when I go around SXSW or Gnomedex or Northern Voice and ask people what they use from Microsoft I get blank stares. Microsoft has lost the Internet generation because they simply have not done anything interesting. Spending another $100 million on advertising is not going to change that.

Heck, they should stop the advertising, use the $100 million to get Twitter’s attention and buy it. But that’s what Microsoft would do if it had real Internet leadership that understood just how important Twitter’s search feature will be to getting Microsoft noticed in the search game.

Here: what will work better to get more people to feel good about Microsoft? Spending $100 million on TV ads? Or using that money to buy Twitter?

No brainer for me.

But here’s the problem: I don’t believe Microsoft wants to get the Internet. So, if Microsoft DID wake up and buy Twitter it would be a horrid place for Twitter to be. It would stagnate even worse there than it would at Google.

Which is why, even though I don’t like Twitter’s management team that much, I’m hoping that they sell to Google instead of Microsoft. At least then it has a chance of success, Google’s poor track record in this area notwithstanding.

What a week in the microblog world.

First Facebook’s Mark Zuckerberg had a ton of really nasty articles written about him after his CFO left and was replaced. My take? Zuck got the service to 200 million and he’s one of the smartest businesspeople I’ve met. He’s also young and has definite ideas of where he’d like to take Facebook. He also has investors that he has to listen to at least a little bit. Add all that up and it’s a spot I’m glad I’m not in. That said Zuckerberg and crew are so close to the gold that their metal detectors must be going nuts. Now they have to execute and get show us how they are going to add businesses to the social graph and also how they are going to build public entities so that they can take the hype away from Twitter. If they get those two done, they’ll cash in big time. But those are two big ifs, especially if there are major management troubles like what some of the bloggers are sensing.

The second big shift this week was Mike Arrington’s reporting that Twitter is in talks with Google to be sold for a quarter billion dollars. First, disclosure: I really don’t like Twitter’s management team. I think they have more problems than Zuckerberg. They treat their community even worse than Facebook does. Their technology has been horrid (and still has major problems, when I refresh Twitter 100 times I see a Fail Whale at least five times, if not more). But, no one can argue the fact that Twitter has gotten more PR in the past 30 days than any other company I can remember getting in the past year. Everytime I turn on TV or Radio lately I hear “we just Tweeted.” That alone is worth a ton and they deserve to be compensated for yet again building a great brand. Why does Google want Twitter? Easy, search features. How did I learn about the Chinese earthquake? Well, that was by accident (I was the first American to tell someone else about the earthquake) because I follow so many people. But what did I do after that? I went to http://search.twitter.com and started watching what everyone was saying about the earthquake. Today tons of people do that or use tools like Twhirl and Tweetdeck to do those searches.

Lots of my friends think that this search behavior will let Microsoft get back into the search game if Microsoft bought Twitter. Heck, Todd Bishop just wrote that too. Unfortunately Steve Ballmer doesn’t understand Twitter (he isn’t on it and probably thinks that’s yet another stupid thing that Scoble uses) so he probably won’t see the value here. Ballmer has done a horrid job at getting Microsoft into the search game, so I’ll be shocked if he wakes up and buys Twitter. Of course just by saying that I probably made Ev and Biz a few hundred million dollars more — if Microsoft and Google get into a bidding war valuations on Twitter could go up to a billion or more. Pretty rich territory for a service that has only 10 million users in the United States.

The third shift? It actually is coming on Monday as friendfeed brings out a completely new UI. I saw it last night and I’m still stunned (mostly in a good way, but change is always exhausting). I’m not sure I’ll like it all, but you’ll definitely want to watch the video I shot of the press conference and I will have a LOT more to say on this on Monday morning. I’m under embargo until Monday, but the video is long and they go into tons of details about the new UI and their business.

What a week in social networking/microblogging. Can’t wait to see what happens next.