Twitter soars 20% amid latest acquisition rumors

Steven Loeb · September 23, 2016 · Short URL: https://vator.tv/n/475d

The most likely purchasers are Google or Saleforce, which recently lost out on buying LinkedIn

Rumors of a potential acquisition of Twitter are nothing new. It's the kind of news that seems to pop up a few times a year, but it never really goes anywhere, and typically turns out to be false.

Something feels different this time, though. Maybe it's because even Twitter's own founders aren't dismissing the idea, or because the rumors are going beyond just speculation or informal talks. This time it seems like it might actually happen, and investors couldn't be happier.

Twitter has received expressions of interest from "several technology or media companies," according to a report from CNBC on Friday. It may even be getting a formal bid from some of them soon, and a deal could be done before the end of the year.

Right now two of the potential acquirers are known, one a perennial suitor, the other a bit more surprising: Google and Salesforce. 

Twitter investors are elated at the news, sending the company's stock up 20.67 percent to $22.48 a share. The last time Twitter's stock was this high was back at the very beginning of this year, nearly 10 months ago. 

Twitter acquisition rumors

When it comes to which companies are most likely to be acquired, it seems like you can't throw a rock without hitting someone who believes Twitter's sale is imminent.

In June, Bob Peck, analyst at Suntrust Robinson Humphrey, wrote in a note that a sale was "inevitable" if the company didn't start doing the hokey pokey, aka turning itself around. A post from BTIG analyst Richard Greenfield also speculated that all of Twitter's activity in live streaming sports was a way to get major media companies interested in a purchase.

I even wrote a piece like this myself after rumor started going around that Twitter was going to be purchased by News Corp in January. That turned out to be false. There was also a rumor in June of last year that Bloomberg had made a bid, but that turned out to be false as well. 

It's not a surprise that Google would formally bid on Twitter; after, it's the most frequently assumed target for such a purchase, mostly because of how badly that company wants to get social right, following the failure of Google+. There are even reports of such a takeover going all the way back to 2009

Last summer, when Twitter's stock dove under $30 for the first time ever, speculation of this sort about Google rang up again, but obviously came to nothing at the time.

So, Google is a company that has been talked about as a potential acquirer of Twitter for years; Salesforce, on the other hand, is a new player on the scene, and one that doesn't seem like as much of an obvious fit, given that Twitter is a consumer driven service and Salesforce is a cloud services provider for the enterprise.

Of course, Salesforce was a major player when it came to the acquisition of another social network, LinkedIn. Salesforce made a bid for the company, which eventually wound up being acquired by Microsoft for $26.2 billion in June. That one made more sense, given LinkedIn's focus on job recruiting, but perhaps Salesforce sees more uses for Twitter as an enterprise tool as well. 

Vala Afshar, Salesforce.com's chief digital evangelist, certainly seems to be on board with the idea of acquiring Twitter, tweeting out all of the reasons that it would be a good fit for his company on Friday. They include the fact that Twitter is a "personal learning network" and that it's the best place to get "realtime, context rich news."

However, he later clarified that this was not a formal endorsement of his company acquiring the company, but that, as he put it, "I simply love Twitter."

A spokesperson for Salesforce said the company doesn't comment on "rumors or speculation."

Vatornews reached out to Twitter and Google for comment as well, and we will update this story if we learn more. 

(Image source: telegraph.co.uk)

Read more from our "Trends and news" series

More episodes

Related Companies, Investors, and Entrepreneurs

Twitter

Startup/Business

Joined Vator on

What is Twitter?

Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests. 

Where did the idea for Twitter come from?

Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.

How is Twitter built?

Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes. 

We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.

How do you make money from Twitter?

There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.

In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet. 

At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.

Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.

 

What's next for Twitter?

We continue to focus on building a product that provides value for users. 

We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.