This morning, CNBC published a report revealing that Twitter may soon receive formal takeover offers from suitors including Google and Salesforce. Unnamed sources informed the news site that “several” technology and media companies have sent expressions of interest to Twitter, making a sale likely. The news has enabled Twitter’s stock to reach unanticipated highs. The company is now trading 20 percent up over yesterday.
Twitter’s board directors are said to be “largely desirous” that the company reaches a deal. However, it is not thought that the sale will come immediately and there’s no guarantee that the offers will be accepted. The conversations are “picking up momentum” though and are set to conclude before the end of the year.
After CNBC’s report, TechCrunch published its own piece revealing the identity of two other potential buyers. Microsoft and Verizon have also expressed interest in Twitter, according to independent sources. None of the named parties have publicly acknowledged the speculation now surrounding them.
Earlier this year, Microsoft announced it is buying LinkedIn in a deal valued at over $26 billion. It later emerged that Salesforce was also interested in purchasing the company but ultimately lost out to Microsoft. Salesforce, an industry-leading cloud computing provider, may be viewing Twitter as an alternative to LinkedIn. With Microsoft also expressing an interest, the company could lose out again though.
Salesforce has only half the market value of Twitter in cash so would need to find the remainder from other sources. The company has already made more than $4 billion worth of acquisitions this year. While Salesforce is unlikely to be especially interested in the social aspects of Twitter, the data it generates is what the company specialises in. According to CNBC, Twitter’s data reserves are as important in the discussions as its place as a media company.
The other suitors also have their own reasons to buy Twitter. Verizon could add it to its growing portfolio of media companies. It now owns AOL and Yahoo, companies which Twitter could sit between. Verizon is still finishing up those large-scale acquisitions though and may end up losing out to the other parties at the table.
Google could use Twitter to increase its presence in social media. The company has long indicated it wants its own successful social network, launching Google Plus in an attempt to rival Facebook. The platform hasn’t really taken off, despite proving popular with niche communities. Twitter would give Google a much wider social appeal, as well as access to the vast reserves of data it could integrate into its other products.
Finally, Microsoft has firmly established itself as a cloud-based software company, eager to connect people and drive productivity. Having already purchased the professionally-oriented LinkedIn, the company could use Twitter to expand its portfolio of cloud services. Twitter’s data would also be an attraction to Microsoft.
Neither Twitter or any of the interested parties have any comment to make at the moment. A sale of Twitter could prove beneficial to the struggling company though. Under the leadership of a tech firm like Google, Twitter could expand its outreach and attract new users. That’s proven to be Twitter’s biggest problem over the past few years and one it’s demonstrated it cannot solve on its own.
