Twitter’s attempts to be sold have proved remarkably unsuccessful so far, with no deep-pocketed company as yet willing to put in a bid. The micro-blogging service has since seen shares plummet.
A decade from now when we look back at Twitter, what will the business model look like? Profit may have finally emerged in 2015, but the enthusiasm that Twitter was met with 10 years ago has fizzled out over time.
Jack Dorsey, CEO from 2006 to 2008, returned last year to reprise his role at Twitter and has seen plenty change. The company is currently seeking a buyer but, to date, it’s not going well.
Early reports showed Google, Disney and Salesforce were linked to buying Twitter but each have, in their own way, withdrawn their interest. There doesn’t appear to be a Microsoft-buying-LinkedIn moment on the horizon just yet.
And the chill of major companies letting the opportunity pass them by has had a rough impact on Twitter, with its shares falling fast.
In what some have termed a tailspin, Twitter’s Wall Street performance yesterday was terrible, dropping 20pc and removing the vast majority of the initial upswing that came from the early purchase rumours.
Salesforce is not completely out of the hunt, though reports from the US hint that CEO Marc Benioff, still smarting from his company’s failure to get LinkedIn ahead of Microsoft’s purchase, fails to see value in the micro-blogging service at the moment.
At $19 a share, Twitter stock is about a quarter of its 2013 peak. In asking for $29 a share from potential buyers, Benioff walked away, just as he did when the LinkedIn price reached $26bn.
“Paying north of what Microsoft paid for the far more profitable LinkedIn, the price he needed to commit to in order to get Twitter’s board to sell, just killed the deal, especially because Salesforce execs were concerned that Twitter’s site has become too darned mean,” said CNBC’s Jim Cramer.
Cramer was speaking after Benioff told CNBC that Twitter was “an exciting product, but obviously the business has a lot of challenges.” Salesforce stock faltered when the company was linked with an acquisition, and perhaps it’s too much hassle for Benioff.
According to Reuters, Twitter wants a sale finalised by the end of October but even that seems odd amid claims that the company itself is in two, or three minds.
Bloomberg recently reported that Dorsey’s control is slipping at the company. While he wants the company to remain independent, co-founder Evan Williams wants to sell.
That cleavage emerges just as CFO Anthony Noto has apparently stepped in to seize more control of the company “amid Dorsey’s passive leadership”.
So the company’s leadership is confused, the business model has produced lukewarm results financially, big companies don’t see value in it at present, and its shares are heading south.
Again, in 10 years’ time, how will we judge Twitter?