Google sees this feature as advantageous to Twitter, just as much as Twitter sees it as advantageous to Google. Negotiates to extend the contract could have failed for any number of reasons.
Without access to the firehose, Google cannot derive any value from tweets, but without Google's help, there's a good change that Twitter can improve their own real-time search. So I would say that Twitter is in the stronger negotiating position here, especially since with Buzz and Google+, Google is trying to create its own firehose of user-created realtime content.
Google sees this feature as advantageous to Twitter, just as much as Twitter sees it as advantageous to Google. Negotiates to extend the contract could have failed for any number of reasons.