Twitter Inc (NYSE:TWTR) saw its shares rise 4% amid rumours of a potential buyout. Google Inc (NASDAQ:GOOGL) is rumoured to be one of the potential buyers. There was also a rumour that Twitter had hired Goldman Sachs to fend off any unsolicited bid.

Read what this analyst has to say about TWTR.

The buyout by Google makes sense given the problems it has suffered in the social market sphere and the recent search deal with Twitter. However, this is not the first time Twitter has been subjected to takeover speculation.

Henry Blodget notes that a deal is unlikely. He is of the view that Google missed its chance when Twitter was small though he notes that Google has the cash to buy out Twitter.

Twitter currently has a market cap of $34 billion. Google has a cash pile of $60 billion. However, Google will have to pay a premium to Twitter were it to make a buyout bid. Twitter’s shares have been on a roll after it announced that its fourth quarter revenues increased by 97%.

Many pundits had written off Twitter in 2014, but Twitter shares jumped 40% since February this year. For the moment, at least Twitter seems to have addressed monetization concerns. However, Blodget notes that Twitter has a fundamental problem in that it is only a website for news addicts and celebrity followers.

Also, Twitter might be getting more coverage than its audience base suggest due to its high usage by journalists. Twitter has a monthly audience of 300 million which is lesser than Instagram. Further, only one-third of the users use the service daily, and 44% have made and account and never tweeted according to DMR, a research firm.

According to Blodget, everyone knows about Twitter Inc (NYSE:TWTR), relatively few people have used it as the site is service is still niche. However, Blodget is optimistic on the business of Twitter and predicts that the company will be “astronomically profitable someday” as it has zero costs and a global audience.