Disney may be interested in placing a bid to acquire Twitter as recent reports suggest the former is currently evaluating whether it should make a move. The mass media and entertainment company is purported to be in talks with a financial adviser regarding the matter.
Rumors of Disney's interest in buying out Twitter comes just a few days after a CNBC report revealed that several tech companies have expressed interest in acquiring the microblogging platform. Salesforce and Google are said to be among the main suitors.
"Twitter has received expressions of interest from a number of technology companies that are considering whether to make a bid for the social media company, and its board of directors is said to be largely desirous of a deal, according to people close to the situation," reports CNBC. "While Twitter may receive a formal bid shortly, it has thus far engaged with potential suitors who are examining the possibility of a deal and Twitter's willingness to engage on that possibility."
Microsoft and Verizon are also alleged to make their bids for the potential Twitter acquisition. Talks of the acquisition came about after Twitter failed to meet its Q2 2016 revenue estimates and lowered revenue projection for Q3 2016.
Moreover, recent market surveys suggest that majority of businesses plan to reduce their ad spending on Twitter due to the premium rates that Twitter charges. Businesses would rather spend for ads on photo- and video-sharing platforms such as Instagram.
Reports of several suitors who are interested in acquiring Twitter caused the company's stocks to soar by 21 percent on Friday, Sept. 23. However, the problem is that it's not easy for these companies to use Twitter effectively in line with their existing products. At least not to a point that would justify a $16 billion spending for the buyout.
So, Why Is Disney Interested In Twitter?
James Cakmak of equity and research firm Monness, Crespi, Hardt & Co thinks that it could be for video distribution.
"What Disney has to think about is what is its place in a post cord-cutting world," Cakmak told Bloomberg. "They are investing in technology for distribution — and this would give them the platform to reach audiences around the world."
Note that Jack Dorsey, Twitter CEO, is currently on Disney's board of directors.
Also, bear in mind that Disney owns ESPN and ABC News. Many comment that Twitter can indeed be used for real-time news and sports events. Twitter itself is expanding on this aspect by signing with video providers such as the NFL and Bloomberg.
However, not everyone is sold on the idea that Disney would buy out Twitter.
"Once Disney takes control over Twitter, how can Twitter possibly work with any other content company — the kind Twitter needs if it wants to be a video company? If you want Time Warner, or Viacom, or even BuzzFeed to send you their stuff, you can't do it if you're owned by a major rival," writes Peter Kafka of Recode, pointing out that Twitter would cost more than what Disney paid for Pixar, Marvel and Lucasfilm combined.