The latest scoop on the tech circuit is about Google negotiating to merge with the popular social networking and microblogging site, Twitter. Techcrunch maintainer, Michael Arrington has revealed that three sources have lent credibility to this rumor circulating the blogosphere.

In his first post, Arrington said Twitter had rejected a whopping half a billion-dollar offer from Facebook. In a later post, sources from Twitter said the owner wouldn’t sell even for $1 billion.

The main question is whether Google can really profit from this acquisition. Analysts have deduced that this symbiotic relationship can help Google to better its search results and eliminate any possible threats from Twitter due to its rising microblogging superiority.

The positive thing about Twitter is that virtually anyone can use. People discuss everything from products to relationships. Not to be outsmarted; Twitter can smoothly proliferate and broaden its reach remarkably due to this high priority tag. This will probably solve its cash crunch and extend its longevity.

In addition, watching YouTube videos with Twitter would be a great collective experience. The main shortcoming of this proposal is pertaining to AdSense. There is a need to apply AdSense in each property by Google, which implies that Twitter will follow pattern.

Since many people use Twitter outside the standard interface or homepage, Google will have to add the code to the Twitter API. Hence many third party applications like Twhirl and TweetDeck will need ad integration in order to continue using the API.

However, some critics say that IT firms should hesitate to purchase companies in their infant stages and instead return the funds to the shareholders in an annual dividend. This is due to the axiom that social networking organizations are incapable of being monetized.

In the case of Twitter, the easiest way to make some cash would be to allow paid subscription or to seek advertisers. Biz Stone, the cofounder of Twitter has smashed the rumor and has mentioned in his twitter blog that his sole aim was to build an independent, profitable company. This comment was succeeded by Arrington’s blog article about the Goggle-Twitter business deal. He had said that the estimated price was not known but it could be over $250 million.

Rival Silicon Valley technology columnist, Kara Swisher has mentioned in her blog that the two companies have conducted discussions related to product and real-time search engines.

Eric Schmidt, Google chief executive showcased duplicity when he addressed Twitter as a poor man’s mail service and later praising it for its efficiency. Satirical columnists have claimed his comments on Google not planning to buy any company due to global recession and lack of anything particularly itself as a blue print to the soon to be finalized Google-Twitter merging.