This is not the first time that Twitter has been discussed as a potential target acquisition in context to tech companies. The ongoing conversations in the last one week however appear to be as serious as it gets. While the likely suitors have been touted to be Microsoft, Salesforce and the mighty tech giant, Google, an interesting name has surfaced in the form of Disney.
Twitter’s current market capitalization is pegged at USD 20 billion. Despite various changes in its leadership structure, the company’s expansion plans and other strategic decisions to propel growth, Twitter has not been to turn itself into a profitable company. In the second quarter of 2016 alone, Twitter has reported a loss of USD 107 million. Unlike its peer such as Facebook, Twitter has not been able to get advertisers to spend the needed monies, no matter how much they have accepted the platform over the years.
The speculation of a buyout has not only resulted in an increase in the Twitter stock in the last few days, but on Monday it has also raised certain questions on whether the acquisition of a company such as Twitter, which is not tethered to rules that traditional media companies follow in their content policies, will benefit the newest suitor – Disney.
Some analysts have gone on record to say that Disney would not engage in such a deal because the deal price that it may entail would be much more than anything Disney has invested in the past but the two platforms do not necessarily make a perfect fit. On the one hand, industry practitioners have pointed out that as legacy media embraces newer forms, Twitter will provide an apt distribution and second screen engagement platform for Disney whose media empire includes Pixar, Marvel and Lucas Films by acquisition. But on the other hand, the support Twitter receives from other media companies may be compromised as it gets attached to one of their competition which may impact user engagement on the platform.
Twitter’s expected sale has led to various conversations – what it could mean to Google’s dominance, a second social media brand for Microsoft following the LinkedIn acquisition and what a Salesforce-Twitter team up can mean for the industry at large. The bigger picture however is a reminder of the consolidation that the technology space has been seeing for some time now. The very early examples of Google and YouTube were followed by more recent ones of Facebook acquiring Instagram and WhatsApp – two platforms that have become interesting to marketers.
This year itself saw the sale of Yahoo to Verizon that had already added AOL to its mix, giving the market the hope for a third force that could challenge the Google-Facebook duopoly. LinkedIn joined the Microsoft family earlier in the year. And now, the second most popular social media player is on the block.
The development is interesting not only for the deal itself and which way would Twitter go if it does goes eventually through the sale but also because it is an indicator of the changing technology landscape and the emerging “power teams”.
