Twitter Inc has initiated talks with several technology companies to explore selling itself, a person familiar with the matter said on Friday, signaling the start of what is likely to be a slow-rolling auction of the high-profile, but money-losing, social media company.
A sale of Twitter has been the subject of on-again, off-again rumors for many months as the company grapples with stagnant user growth, soft advertising sales and losses running at hundreds of millions of dollars a year.
The company’s business struggles have come even as the 10-year-old service has evolved into a potent global source of news, entertainment and social commentary.
CNBC, citing anonymous sources, on Friday reported that Twitter is in talks with companies including Google and might receive a formal bid soon. A source told Reuters that Salesforce.com Inc is also in pursuit.
Twitter and Alphabet Inc, Google’s parent company, did not respond to a request for comment. Salesforce declined to comment.
Verizon Communications Inc, another company mentioned in media reports on Friday as a possible suitor, said it did not comment on merger and acquisition rumors, but that it had not submitted a bid for the company.
Twitter shares jumped more than 19 percent to US$22.22 per share on Friday, marking the largest one-day rise since their first day of trading in 2013. The company now has a market value of about US$16 billion.
Morningstar analyst Ali Mogharabi said Alphabet would be the best acquirer for Twitter since it has not yet been able to crack social media on its own despite several efforts.
“From a strategic standpoint, we think it would be more beneficial for Alphabet as opposed to Salesforce,” Mogharabi said.
Former Google executive Omid Kordestani is executive chairman of Twitter.
The most unexpected development on Friday was Salesforce.com’s interest in acquiring Twitter. Salesforce serves business customers with cloud-based computing services and has virtually no presence in consumer media.
However, a recent presentation about its new “Einstein” artificial intelligence platform provided a peak at how Twitter could fit into the company’s strategy.
Salesforce executives said they license the Twitter “firehose” of all Tweets that come through the platform, and use it to power sentiment analysis and other tools that show how companies and brands are being discussed and perceived. The two companies are located just blocks from each other in San Francisco.
Twitter missed Wall Street’s sales expectations in both the first and second quarters, 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 had an accumulated loss of nearly US$2.3 billion since its inception.
It has also failed to keep pace with rivals, notably Facebook Inc’s Instagram and Snapchat Inc. Both now boast more users than Twitter by most measures even though they are much newer, and advertisers have begun to migrate their ad dollars accordingly.
Twitter went public in November 2013 at US$26 a share. The shares peaked above US$74 just over a month after its initial public offering, but have been on a steady downward trajectory since. From then through Thursday’s close at US$18.63, the stock had lost three-quarters of its value.
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