Twitter Inc. is holding informal
talks with several potential buyers after receiving interest from Salesforce.com Inc., people familiar with the situation said.
Twitter’s board met several weeks ago after hearing from Salesforce, said the people, who asked not to be named because the information isn’t public. Twitter then hired Goldman Sachs Group Inc. and Allen & Co. to solicit other potential buyers as well as Salesforce, the people said. Salesforce didn’t make a formal offer, according to the people.
While there’s no assurance an acquisition will happen, sale talks could accelerate into a deal in a matter of weeks, one of the people said. Twitter is also working with Goldman on options besides a full sale, like a divestiture of non-core assets, one of the other people said.
Twitter’s stock has fallen after several quarters of slowing growth, putting it in play as a potential takeover target. The company is still attractive because of its data, user base and influence in politics, culture and the media. Twitter recently expanded into live video streaming, making it possible for some users to watch NFL games for free, with Tweets related to the game appearing alongside the video. It’s making similar deals for content related to politics, business and entertainment.
Twitter co-founder and board member Ev Williams fueled takeover speculation last month when he said in an interview that the company has “to consider the right options.” He was responding to a question on Bloomberg TV about whether Twitter can remain an independent company. This is the second time this year Salesforce has jump-started a sales process of a large social media company. Salesforce expressed initial interest in acquiring LinkedIn Corp., according to people familiar with the matter, ultimately leading to a sale to Microsoft Corp.
Twitter shares surged 21 percent to $22.62 on Friday after CNBC reported the company has received expressions of interest from several technology or media companies and may get a formal bid shortly.
Twitter could provide Salesforce with similar benefits to LinkedIn. Though Twitter is typically considered a consumer product, the social media company’s 313 million monthly active users include many professionals — people who Salesforce customers already may be targeting for potential deals. Its data may help improve the Salesforce software that companies use to manage customer relationships.
More than 70 percent of sales professionals use social selling tools, including LinkedIn, Twitter and Facebook, to help close a deal, build stronger relationships and expand revenue, according to a LinkedIn report. And Salesforce itself in 2014 said Twitter was the “largest cocktail party in the world,” according to a post on its website.
Twitter may appreciate merging with a technology company as opposed to a media company, where it may have conflicts over content. 21st Century Fox Inc., Comcast Corp., Time Warner Inc. and AT&T Inc. are not interested in buying Twitter, according to people familiar with those companies’ strategies. And any acquirer would face challenges turning Twitter around, or molding its strategy to suit new priorities.
“Microsoft’s LinkedIn acquisition has raised speculation of a Twitter takeover, though weakening user metrics and lack of clear strategic buyers suggest it wouldn’t command the same premium,” analysts at Bloomberg Intelligence said in a note.