It is now almost two weeks since reports started making the rounds that some firms were in talks with Twitter about a possible sale of the company.
And to make the news seem very credible, Twitter stocks on Wall Street appreciated by as much as 23% on the back of this news.
Two companies that featured prominently in the buy out talks like Google who everybody know as the search giant, up to this moment have been trying to make inroads into the social forum niche without much success. A successful take over of Twitter by them would have given them a good platform to launch another bid into that niche.
The second company is known as Salesforce. A San Francisco based company established seventeen years ago by Marc Benioff. Their business is providing cloud computing services to firms.
But yesterday, the news coming out of Silicon Valley was that Salesforce is now in pole position to buy Twitter. This is not because Salesforce’s package was better than what Google and the others are offering, it is simply because, all the other companies either dropped out of the race or were never even in the running.
The reports claimed that even though Twitter is willing to listen to offers from all these companies, it shouldn’t come as a surprise if a sale never happens after all . But Twitter would love to be able to announce something to their shareholders before the 27th of October when fourth quarter results would be released.
Apparently, the stars seem to favor Salesforce as the next owners of Twitter. Another report is claiming that Mr Benioff is very bullish about the prospects of his company taking over Twitter.
He gathered some very important people in the world of business and investment yesterday to discuss the future of Salesforce with them. This sort of meetings are normally held to solicit for funds to take a company to the next level.
From the caliber of people at the meeting, it is clear Mr Benioff is not going to pitch for peanuts. $17 billion or something in that region is what he would be asking the investors to give. Because that is the market value of Twitter as of today.
If the acquisition of Twitter by Salesforce goes through, it would easily be Mr Benioff biggest acquisition so far. And what would be more remarkable about a successful deal is that Salesforce, which is valued at about $50 billion is not a profitable company.
So getting that sort of Money would be a testament of Benioff skills as a consummate businessman.
However, getting the money could be easiest part if he can pull it off. Making a success of Twitter would be the hardest part.
Twitter is a product that has to compete with the likes of Facebook, Facebook Messenger, Instagram, and Snapchat. Even looking at Twitter’s figures in isolation is not encouraging at all.
For some years now, Twitter has not being able to attract new users in their numbers. The number of daily tweets are failing indicating that the over 300 million users of the service do not bother using it. Even Snapchat now has more daily posts than Twitter.
Let’s assume Benioff is able to pull off this deal. Making Twitter a competitive brand would be a miracle but it seems he has enough pedigree to give him and his investors confidence.
However, the reaction of the stock exchange show that Twitter investors would rather have Google as the new owner of Twitter. Twitter shares fell on the back of this latest news.
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