Twitter drops 9% on reports of bidders dropping out

Steven Loeb · October 6, 2016 · Short URL: https://vator.tv/n/4780

Google, Disney and Apple aren't going to bid, leaving only Salesforce in the running

Just like that, after a week and a half of frenzied speculation, the Twitter acquisition now seems to have come to a screeching halt, as it is becoming unlikely that any of three of the main candidates who were said to be in the running, Salesforce, Google or Disney, are actually going to follow through.

Google is not currently planning to make a bid for Twitter, according to what sources told ReCode on Wednesday. Later, sources close to Disney said the same thing

It had seemed that Google was the most likely acquirer of Twitter, mostly because it has been the most frequently assumed target for such a purchase, given how badly that company wants to get social right after it failed with Google+. There have been speculation about this kind of deal going all the way back to 2009. Remember that Twitter was only founded in 2006, so this has been going on for most of its life.

Disney also made some sense, as it could benefit from Twitter becoming more of a media company. That would certainly have appealled to Disney, which owns both ABC and ESPN, and might have been looking for a social media platform to leverage all of that content, especially as people have started to cancel their cable subscriptions.

ABC currently allows users to live stream its shows on its website, in certain markets, and to watch the most recently aired episodes ABC Overview, but buying Twitter automatically brings in over 300 million users already familiar with the service. 

Twitter's deal with the NFL to air Thursday Night Football games seemed like a reason it would be interesting to Disney, since ESPN owns the rights to Monday Night Football.

There's also the fact that Jack Dorsey, chief executive officer of Twitter, currently sits on the board of directors at Disney, so the company would seem to have a potential in to getting access to Twitter.

According to ReCode's reporting, Apple was also in the mix to buy Twitter (thought I had not heard the name come up) and it too has decided not to make a bid. 

No reasons were given for why any of these companies seemingly changed their plans.

These reports leave only Salesforce as a potential acquirer right now, and CEO Marc Benioff didn't sound all that enthusiastic about it when speaking to CNBC's Jim Cramer on Wednesday.

"It's a great product," Benioff said. "It's an exciting product, but obviously the business has a lot of challenges, very severe challenges."

While he wouldn't comment directly about the potential deal, as is his standard practice, his statements do not make it sound like it's going to happen. 

"All I can do is one thing, which is wish my good friend Jack Dorsey well. He is the CEO of that company. It's his job to make that a great company. It is my job to make Salesforce a great company."

Salesforce always felt like a longshot for this acquisition, as it never seemed 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. 

So, where does this leave Twitter? Well, the company is definitely looking to sell, that much is known. Reuters is reporting that the company wants to conclude negotiations about selling itself before the end of the month. Twitter will report its third-quarter earnings on Octocber 27.

With no companies in the running to acquire it, though, a sale of Twitter suddenly feels a lot less likely, and investors are not happy.

The company, whose stock had risen 20 percent on the news that Google was interested, crashed in after-hours trading, dropping over 9 percent.

" We do not comment on rumors," a Salesforce spokesperson told me,

VatorNews reached out to Twitter, Disney and Google, for comment. We will update this story if we learn more. 

Update:

Twitter's stock dropped 20.1 percent in regular trading on Thursday, to $19.87 a share. 

(Image source: abccopywriting.com)

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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.