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Is Twitter up for grabs? Google, Salesforce lining up says report


Twitter is the leader when it come to microblogging sites and has quite an impressive userbase, but when compared to other social networking sites its userbase has been stagnant for a long time because of which its revenue hasn’t been increasing.

Twitter has been having a relatively high public profile and after the initial surge in users, Twitter not only faced revenue slowdown issues, but also management turmoil since its earliest days. According to CNBC, Twitter has already initiate acquisition talks with technology majors such as Google and Salesforce and if all goes well, it may receive a formal bid as well.

With takeover reports hitting the web, there was an upsurge in share prices for Twitter by more than 20 per cent to $22.46 per share on Friday. According to analysts, Twitter could receive a bid for buyout at $22 a share and the best company which could benefit from this acquisition is Alphabet.

One of the major questions being posted by many of Twitter’s investors is how long will the company be able to survive as a stand alone company at a time when there are rivals such as Instagram and Snapchat who are gaining a lot of traction – both from userbase perspective as well as advertisers.

Hopes for Twitter’s revival reached a new high when Co-founder Jack Dorsey returned to the company as chief executive in 2015, but there hasn’t been a substantial change and things are not moving in the direction Twitter’s investors would have thought of.

The company has struggled to generate revenue growth and profits, despite having some 313 million average monthly active users and a growing presence as a source of breaking news. It grew its user base by less than 1 per cent in the second quarter.

Twitter missed Wall Street’s sales expectations in both the first and second quarters of this year, according to Thomson Reuters StarMine, and has yet to produce a net profit in 11 quarters as a public company. As of the end of the second quarter, the company has an accumulated loss of nearly $2.3 billion since its inception.

As a result, Twitter shares have struggled to retain their brief upward momentum following the company’s highly anticipated initial public offering in November 2013 at $26 a share.

The shares peaked above $74 just over a month after its IPO, but have been on steady downward trajectory since. From then through Thursday’s close at $18.63, the stock had lost three-quarters of its value.