May 4, 2015 · 6 minutes

Unless a company is incredibly good or incredibly lucky, its product will likely never garner more press than it did on the day it launched. So it was when Ben Huh and Matt Galligan unveiled Circa two and a half years ago, and the mobile news app was met with a heap of excitement, particularly among those who believe we need technology to "save" journalism. Now Circa may be entering its twilight as Fortune reports that the company was unable to finalize a Series A term sheet and is instead looking for buyers. (Business Insider reports that Twitter is in "serious acquisition talks" with the company. More on that in a second).

It only seemed like yesterday that Circa was the belle of the ball, with $5 million in funding and slew of optimistic media reports about its launch. But while Pando's Sarah Lacy admired Circa's ambitions, she was not among its more bullish fans. She wrote at the time that Circa -- which broke news stories down to atomized facts which allowed readers to dig deeper into concepts as they so chose -- was unique and grand, but that its thinking that it could save journalism by killing articles was wrongheaded. Yes, a lot of news -- particularly the biggest stories that are aggregated and reaggregated by bargain bin bloggers across the netosphere -- has become a commodity. And Circa was merely treating it as such, concentrating less on substance and more on delivery and usability. And while this "just the facts" approach might be welcome in some verticals like politics, where much of the "reporting" has become all spin, it takes things too far in the opposite direction, sucking everything readers want out of a story -- voice, humor, opinion -- until all that's left are atoms and bits. Or put another way, the problem with journalism was never that there were "too many good stories," and in "solving" this "problem," Circa failed to offer anything to thrill a redblooded human reader. (Perhaps in the future when robots become consumers themselves, Circa could relaunch -- but until then, the human race has spoken).

In any case, with a Series A likely out of the question, Circa is taking acquisition offers and sources told Business Insider that Twitter is at the top of the list. Meanwhile, CEO Galligan emphasized to Pando in an email that he "didn't 'put Circa up for sale'" and that "after evaluating all the inbound interest from potential acquiring parties, we decided [acquisition] would be the path we wanted to pursue." That may be a faithful characterization of what happened, and maybe Circa is in better shape than many news reports suggest. That said, while Galligan says a term sheet was "on the table," there's a big difference between "getting a term sheet" and being anywhere close to signing off on a deal that's attractive to all parties.

So should Twitter bite? Or is the company's failure to close a Series A deal proof that, as Lacy wrote, Circa's assumptions about the digital news landscape were flawed? And even if Circa could gain traction with a big company like Twitter lending it scale, how much would Twitter really benefit from such an acquisition?

First, it's important to consider Twitter's most urgent ambitions. With user growth stagnant and the revenue it collects from each user growing more slowly than Wall Street would like, the company has been targeting users without accounts by offering algorithmically -devised feeds surrounding news, sports, or celebrities. As I wrote when Twitter first launched the feature, these feeds left much to be desired, paling in comparison to both the logged-in Twitter experience as well as most competing news apps.

Enter Circa, a fully-formed news app that, despite whatever struggles to gain traction and more funding it's faced, offers a far more valuable experience than Twitter's half-hearted new homepage feeds. Circa has also experimented with push notifications in fascinating ways to keep always-mobile news consumers both informed on ongoing stories and --more importantly for Circa's bottom line -- willing to revisit the app multiple times a day.

Plugging Circa's technology directly into Twitter's homepage feeds would undoubtedly be an instant improvement. However, appealing to non-logged-in users with a fancy news app may not be the revenue driver Twitter needs. Yes, Twitter can insert promoted tweets into these feeds as they do now, however the real value Twitter offers to Wall Street is in determining purchasing intent from logged-in users who actually tweet and share information about themselves -- explicitly or implicitly. This data is extraordinarily valuable and while it's helped Twitter chase $1 billion in annual revenue faster than many expected, the company is now facing a two-headed monster of both slowing revenue growth and slowing user growth. Creating a product for newcomers will help increase its reach, but the value Twitter can pull out of these non-logged in users pales in comparison to what it can pull out of logged-in users. And because Twitter will likely never catch up to Facebook in terms of users, its selling point to advertisers should not be how many users it has, but its ability to make the most out of each user, the idea being that Twitter consumers are more engaged -- with each other, with celebrities, with brands -- than Facebook users. Building or buying a news app for Twitter tourists won't help that.

With rivals Facebook and Snapchat making big strides to not only link to news content but host it itself, Twitter needs to make a bold move to maintain its position as an indispensable news source. As a journalist, I probably take for granted what seems like Twitter's dominance in this respect. But Facebook surpassed Twitter a long time ago as a destination for young news consumers. According to a report from the Media Insight Project, 88 percent of millennials get their news from Facebook while only 33 percent visit Twitter for news.

Like Facebook and Snapchat, the company would likely be better off striking more direct partnerships with news organizations, as opposed to buying a technology-driven news app like Circa. Furthermore, Twitter already has plenty of technology pertaining to how news is presented and consumed, and would therefore benefit more from buying a more traditional news organization and using it as a playground for experiments.

"If Twitter owned a media company, it could pilot stuff all the time," a source close to the company told Business Insider, "and if it performs well, they can allow other publishers to [use the same tools] ... They're not trying to alienate other publishers because they're going to give them everything they'd give a media company they own ... Anything to get a leg up on Facebook is what they want to do."

In the future, Facebook, Snapchat, and Twitter will be less like social networks and more like television channels. Facebook will be bland network TV where anything remotely risque is quickly excised. Snapchat -- if it plays its cards right -- will be like MTV in the 80s and 90s. Where does that leave Twitter? My guess is it will be something like HBO -- a place for adults to consume and discuss content where anything goes, as long as it's legal. For that, Twitter needs to keep partnering with producers that make all that great content and to build or buy tools that improve its community. And anything else -- like buying or building a news app like Circa, which never really found a solution to a problem that didn't really exist -- feels like a distraction.

[illustration by Brad Jonas]