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Twitter Buyout: Here’s Why Buying The Micro-Blogging Platform With Stagnated Metrics Makes Perfect Sense For Google Or Salesforce

By Patrick Frye
Published on: 10:36 PST, Sep 23, 2016

Twitter might be up for sale and companies like Google, Salesforce, and even Facebook are said to be in talks about a buyout bid, indicated sources with knowledge about the developments. While there is no official confirmation from any of the companies, Twitter is a great buy considering the less-than-ideal situation the micro-blogging network is currently in, and the vast amount of usable data it collects and processes.

The social media platform that limits its users to be creative in just 140 characters is rumored to be available for a buyout, reported CNBC. While several companies could soon be seen clamoring to submit a formal bid, tech giants like Google and Salesforce are believed to be the frontrunners in the race to acquire Twitter. While Twitter and Google have neither confirmed nor denied the rumors, Salesforce declined to comment, reported CNET.

As expected, rumors about Twitter’s buyout have helped the company make a healthy recovery on the stock market. Twitter’s stock jumped more than 20 percent Friday morning on the heels of the rumor that serious buyers are “examining the possibility of a deal and assessing Twitter’s willingness to engage on that possibility.”

It is strongly believed that the social media company is currently engaged in preliminary talks with potential suitors. Interestingly, even Twitter’s board of directors are said to be keenly interested in being bought out, indicated people familiar with the developments. Though there’s no surety the talks about an impending buyout are true or that there’s even a semblance of assurance a deal will ever materialize, many indicate Twitter might make a deal before the end of the year. If Twitter is to be sold before 2017, a concrete acquisition offer would have to be submitted and accepted within the next few days.

Twitter isn’t doing well; it is public knowledge that Twitter hasn’t been doing well in almost all of the segments. It was recently downgraded as investment option, after steadily underperforming on a number of performance metrics tech companies are routinely evaluated on. This makes Twitter a very lucrative company to buy since it still offers a wealth of tangible and engaging information, and will continue to do so for the foreseeable future.

Twitter hasn’t been performing as its upper management had promised. Monthly Active User (MAU) growth, one of the most basic parameters of growth for any social media company, has been essentially flat for the past several quarters. Its third-quarter sales disappointed Wall Street and fell woefully short of estimates. RBC Capital Markets’ analyst Mark Mahaney downgraded Twitter’s stock to “underperform” on Thursday, saying, “This change is based on our belief that Twitter’s value proposition to advertisers could be waning, based on our recent advertiser survey data.”

However, he did point out the potential of the platform, implying those who stick it out with the company during its difficult time could reap huge benefits in the future.

“We note that we still believe Twitter is a unique asset with a strong value proposition to core users.”

With 313 million users, Twitter is nowhere near Facebook. The social media giant commands the attention of 1.23 billion users. To address it various woes, co-founder Jack Dorsey returned as Twitter’s CEO about a year ago. However, his active involvement doesn’t seem to have had any positive or groundbreaking impact on the platform’s functioning or user acquisition and retention. As if internal hurdles weren’t enough, Twitter has to deal with a lawsuit filed by a shareholder who insists the company made “false and misleading” statements about its growth projections.

Twitter’s current predicament presents the perfect opportunity for companies like Google, Salesforce, Facebook, and others to buy the company at a very lucrative, if not rock-bottom, price. While Twitter’s finances might not be great right now, it is one of the most actively engaged social media platforms with ample room for growth and business.

[Featured Image by Andrew Burton/Getty Images]

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