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Twitter Sale: Social Media Platform To Conclude Negotiations Before October Ends

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Unbeknownst to most of its users, Twitter is actually on the auction block for about a month now. The latest report even indicates that it is on the cusp of concluding a takeover agreement.

Bidders, which constitute a diverse group of organizations ranging from Verizon, Microsoft to Walt Disney Co., were reportedly told that the company wants to select the winning bidder by the time it reports its third-quarter earnings, which falls on Oct. 27.

Reuters, which first reported the new development, stated that Jack Dorsey, Twitter's CEO, aims to provide clarity to both employees and shareholders about the direction that the popular micro-blogging platform is heading. It further pointed out that Twitter has already shortlisted the candidates, and this includes Salesforce.com and possibly Alphabet Inc., Google's parent company.

As is usually the case during mergers and acquisitions, parties to the auction remain mum about the process.

But why is Twitter being sold in the first place?

One can turn to the company's recent efforts to generate revenue for clues. For example, Dorsey, since his return a year ago, has been attempting to expand the allowed content limit for each tweet. Some sectors believe this is part of the strategy to include more media into Twitter conversations, which should be where advertisements would come in. There is also the aggressive push to broadcast events such as sports, which is underscored by the company's acquisition of Periscope.

Observers argue that there is a struggle to monetize the platform. Reuters underscored this by saying that the company is yet to make a profit since its debut as a public company despite having around 300 million monthly users.

Twitter, meanwhile, can be a useful tool to its bidders. For example, Walt Disney Co. can use it to market its business or, as Reuters said, to expand its sports and entertainment programming. Alphabet, for its part, would certainly find use for Twitter's immensely popular social and news capabilities or to leverage its fledgling Google+ platform. Salesforce.com, on the other hand, could potentially mine its tweet database for business intelligence.

According to Android Headlines, Microsoft is possibly ingratiating itself into the process in a bid to jack up the sale price in order to keep Twitter out of Salesforce.com's hands. There is some bad blood between the two companies, particularly after Microsoft acquired LinkedIn in an auction that Salesforce.com also aggressively participated in.

People privy to the process are careful to point out that the negotiations and the purported timetable set by Twitter will not necessarily end in a sale.

Photo: Howard Lake | Flickr

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