02/22/2011 10:24 am ET | Updated May 25, 2011

Literally Figurative

So here's what passes for a big M&A scoop these days: a Wall Street Journal story, on the front page no less, reporting that executives at Facebook Inc. and Google Inc. have held "low-level talks" with their counterparts at Twitter Inc. to "explore the prospect of an acquisition." These talks "have so far gone nowhere," we are told, but are "remarkable" nonetheless, because of the outsized valuation they assign Twitter -- $8-10 billion for a company the WSJ reported had just $45 million in revenue last year.

A discussion of that "rich" valuation follows, but the story eventually returns to the likelihood of Facebook or Google actually buying Twitter, which the paper sums up this way: According to one person familiar with the matter, companies including Facebook and Google have expressed "latent interest in an acquisition."

One person? Low-level talks that have gone nowhere? Latent interest in an acquisition? Is that all it takes to score a coup in deal reporting in 2011? The WSJ story touched off a tsunami of follow-up reports by other media outlets, culminating in Twitter CEO Dick Costolo flat out denying that his company was talking to Google. When asked about Facebook, Costolo apparently declined to comment, which got the rumor machine all revved up again.

If Facebook (or Google) does indeed buy Twitter one day, the WSJ will no doubt claim it as a deal reporting coup. And if an acquisition doesn't happen? Well, no matter. Because the story is as much about Twitter and other social media companies' sky-high valuations as it is about those alleged low-level takeover talks. The piece's strange, verb-free headline says it all: "Twitter as Bubble Barometer."

So there you have it. By concocting a whisper-thin M&A story about Twitter, the WSJ was able to get the ever-popular B-word on its front page, furthering a meme that has gripped the media ever since January, when news of Goldman Sachs's investment in Facebook valued the social media giant at $50 billion. The particulars of the piece don't really seem to matter here; it's more about the WSJ suggesting that a social media bubble could be in the works. After all, who needs to be literally correct as long as you are figuratively so?

That seems to be where we are headed these days, at least when it comes to market predictions and the media. Just look at the brouhaha over Meredith Whitney and her call in December that we could see 50 to 100 sizable defaults in the municipal bond market. The now famous (or infamous, depending on your point of view) prediction, made on 60 Minutes, was quickly and severely debunked by a host of muni bond experts, but was shredded most effectively and publicly by a Bloomberg piece this month in which Whitney admitted that she lacked any specific numbers to back up her headline-grabbing claim.

The Bloomberg story pretty much marked open season on the wildly popular Whitney, and it was followed a few days later by a piece in The New York Times, which, unlike Bloomberg, did not score an interview with the analyst herself. But a few days later, a different meme was developing about Whitney, best expressed by Jeff Cox, a staff writer for His conclusion: Her call about the muni market was right, "in that Meredith Whitney kind of way. That's to say that she's correct figuratively but probably wrong literally."

Cox notes that Whitney "gets the general direction right but usually overshoots in diagnosing the depth of the problem," citing her earlier calls on employment and Goldman Sachs' stock price. And he expects her to "be sort of right again -- munis are in for a spate of defaults, but her estimate that more than a hundred governments could do so and cost hundreds of billions of dollars is probably just another round of over-the-top mugging for the cameras."

Viewed through that lens, perhaps the WSJ is right about Twitter's acquisition and a social media bubble "in that Meredith Whitney kind of way." And maybe that's all we can really hope for from the media, as well as analysts and economists, and anybody else in the predictions business. After all, nobody is going to be right all of the time, and sometimes it takes some over-the-top mugging to get your message out. Still, are we really ready to live in a world where facts are viewed as a distant second to an overall theme or meme? That would result in some low-level talk indeed.

Yvette Kantrow is executive editor of The Deal magazine.