11 Predictions for 2011, including Google buys Twitter

Ones I nailed: Palm was sold; Apple released a tablet and Google a phone; Silicon Valley posted gains in the overall number of jobs; the number of public companies in the valley continued to decline; Facebook and LinkedIn didn't go public.

4. No big Internet IPOs. Zynga, LinkedIn, Facebook, Yelp, Groupon. Across Sand Hill Road, folks are praying for one of these to go public and revive the IPO market. Keep dreaming. The then and there generation of great Web companies are running from IPOs like they're being pursued by an army of zombies. Keep running, I say.

5. Google will buy Twitter. Except for search, Google has become the house that acquisitions built. When it comes to money, the company has enough to buy a continent or two. And when it comes to social, its in-house attempts to create a social-networking service have fallen flat. Time to buy its way in. So far, the company has been ditched by Yelp and Groupon. Twitter's latest valuation puts it at about half what Google wanted to pay for Groupon. Google should pony up the cash and buy the mother of all unsustainable businesses: Twitter. And Twitter should say yes because, in spite of its protestations to the contrary, there is no business model there. Nevertheless Google will figure out a way to make money off Twitter's huge user base.

7. Apple launches its long-awaited music streaming service. Apple is just finishing work on a massive new data center in North Carolina. The company bought music streaming service LaLa a year ago, and at that time shuttered it. Expect to see that research reappear as part of the long-awaited iTunes streaming service. That will include some kind of subscription plan and the ability to store your music online and listen to it anywhere.

10. Cloud bubble: The then great bubble will be around cloud computing. Things were already heating up this year as companies bid up storage companies. And the stock of Salesforce.com, the mother of all cloud computing companies, has been on a rampage. By the end of 2010, meanwhile 10 cloud computing startups raised more than $20 million in venture capital. These include such hot names as Joyent of San Francisco, which nabbed $15 million from several backers, including Intel. 2011 will be the year that many larger players swoop in and start buying up these racehorses. Expect vicious bidding wars and talk that some are overpaying.

11. Broadband bill comes due: The surge of mobile data traffic and video will cause such severe network congestion that carriers just as AT&T and Verizon will in the end do the thing that everyone has feared: They will institute charges based on usage. The path to this has been cleared somewhat by the recent adoption of soft net neutrality rules by the Federal Communications Commission. These new plans will ripple across a wide range of businesses and users who will be forced to make tough decisions about what they can and can't afford, and how much of the costs they can pass along to clients.