Twitter could be on verge of a formal bid from Salesforce

23 Sep 2016

The New York Stock Exchange ahead of Twitter’s IPO. Image: Christopher Penler/Shutterstock

As Twitter continues to struggle financially, a number of the world’s largest tech companies – including Google, Microsoft and Salesforce – are reportedly contemplating making a formal bid.

Despite having millions of active daily users, Twitter continues to struggle financially compared with other social media powerhouses out there, like Facebook. Nonetheless, its widespread appeal has seen it attract a number of potential buyers over the years. Now, according to CNBC, some of tech’s largest companies could be about to make a formal bid.

Deal could be struck this year

Future Human

While no sale is imminent, a source close to discussions involving companies like Google, Microsoft and Salesforce said momentum is picking up, with suggestions a deal could be struck before the end of 2016.

Twitter’s board of directors are believed to be keen to get a deal to sell the company done, while its potential future owners would be eager to make use of the platform’s vast amounts of generated data.

In response to the CNBC report, one of those who might be pushing to complete a deal – Salesforce’s digital evangelist, Vala Afshar – posted a series of messages on Twitter that signed off with: “I simply love Twitter.”

If Salesforce were to successfully bid for Twitter, it would make up for its previously failed attempt to purchase a social network after Microsoft managed to outbid it for LinkedIn last June.

Salesforce would need to find money from somewhere

However, according to TechCrunch, Salesforce’s current cash reserves do not make Twitter’s current market cap of $13.3bn, which means that it would have to raise additional funds through shares if it is to make the purchase.

Based on the performance of Salesforce’s shares this morning (23 September), it would appear that shareholders might not be too keen on the bid with a fall of 3pc.

One of Salesforce’s potential competitors, Google, has shown a flat share price following it being linked with a possible formal bid. Google would certainly have the financial muscle to take part in a bid with an estimated $73.1bn in cash reserves.

Details on the remaining possible bidders – including Microsoft and Verizon – remain scant, but sources within these companies have said they are involved in discussions in some capacity.

The New York Stock Exchange ahead of Twitter’s IPO. Image: Christopher Penler/Shutterstock

Colm Gorey was a senior journalist with Silicon Republic