Speaking at the Morgan Stanley Technology Conference in San Francisco yesterday, Google CEO Eric Schmidt called Twitter a "poor man's e-mail system." After criticizing Twitter, and other microblogging services, Schmidt also called Twitter's success "wonderful," praised the company for its innovation, and snuck in a plug for Google's own Twitter feed. While Schmidt seemed to be critical of the microblogging service, his comments have encouraged further speculation the search giant may try to purchase Twitter in the coming months.

The Google chief wondered aloud if Twitter will eventually be forced to "evolve" into something beyond what he called a "note phenomenon" or if it will turn into a service that provides services similar to regular e-mail. Schmidt also discussed the possibility of traditional e-mail services trying to incorporate a Twitter feature into Google's own systems. Whether or not you agree with Schmidt's analysis of Twitter, it's clear that Google has been putting some thought into what Twitter has to offer.

There has been recent speculation that Google may buy Twitter because of its potential threat to Google's core search business. Twitter's search engine, based on a separate search engine called Summize before Twitter acquired it, is very good at cataloging real-time information from its users. That capability, the thinking goes, may be able to cut in to Google's own search business. Instead of searching for current news items on a particular topic, for example, some may turn to Twitter Search where to find the most recent Tweets about a particular topic. Conventions like hashtags have grown up around that concept to make it easier to track a particular topic. The Pirate Bay Trial, for example, uses the hashtag "#spectrial," which journalists and TPB fans have used to track real-time developments surrounding the case via Twitter.

Whether or not Twitter could ever truly threaten a traditional search engine, Google may still have some interest in acquiring Twitter to augment its Gmail offerings, or perhaps just to keep Twitter's search algorithms away from the competition. However, Twitter may not be interested in being bought out by anyone as evidenced by its refusal of Facebook's offer late last year. That may suit Google just fine for the time being, as Schmidt said Google would not be making further acquisitions any time soon as the company waits for "prices to get better."