Issue of the week: Twitter looks for a savior
Twitter is “rethinking whether it can survive as an independent company,” said Mike Isaac in The New York Times. With user growth stalled and revenue flattening, the 140-character social media network is reportedly in early talks with potential buyers, and Google, Salesforce, Microsoft, and even Disney are said to be among the most serious suitors. Any buyer would inherit Twitter’s current challenges, “including management turmoil, lackluster growth, and an unsolved identity crisis,” said Sarah Frier in Bloomberg.com. Facebook, which has roughly 1.7 billion monthly active users, dwarfs Twitter’s mere 313 million users, and upstart Snapchat has more people signing onto its service every day. A buyer would also be tasked with cleaning up hate speech on the platform and fighting state censorship, issues that don’t typically figure in the average corporate acquisition.
“A deal is by no means assured in light of the company’s uncertain financial prospects and steep price tag,” said Liana Baker in Reuters.com. Despite having a stock market value of $16 billion, Twitter has never turned a profit. But if a purchase does go through, expect big changes to follow. Salesforce, which makes cloud-based sales software, could make Twitter more of a business tool, helping companies analyze their online conversations with customers. A Twitter owned by Google could help the search giant catch up in the social media race, where it has long lagged. But such a deal would undoubtedly draw scrutiny from antitrust regulators already nervous about Google’s grip on the web.
“Grabbing Twitter makes great sense for Disney because it adds to the Mouse’s media empire,” said Daniel Roberts in Yahoo.com. Twitter is more of a media company than a social network these days, having cut deals to stream NFL games and the presidential debates. Disney could flood Twitter with content, especially sports clips from its ESPN channel, which is struggling to connect with cord-cutting Millennials. It’s “not insane” to think Disney could buy Twitter, said Peter Kafka in Recode.net. Twitter CEO Jack Dorsey is on Disney’s board and close to Disney CEO Bob Iger. But a Disney-Twitter merger would push rival media companies into the arms of Facebook and Snapchat. Also, why would Disney want to associate its “pristine brand” with “a playground for the worst people on the internet?”
“The only owner that makes sense for Twitter, flawed as it may be, is Twitter itself,” said Will Oremus in Slate.com. Twitter has its issues, but millions of people still use it every day. Bringing in a new corporate owner, intent on leveraging Twitter to boost its own business, would probably mean sacrificing what users love about it, including its role as the “de facto global town square.” Whatever users think, investors are pining for a sale, said Joon Ian Wong in Qz.com. The company’s shares spike whenever a deal is rumored to be in the works, with the stock jumping 20 percent last week alone. “Just the whiff of an acquisition” now has Twitter investors’ flagging hopes up. And when shareholders want something badly enough, they tend to get it.