Twit­ter sale talk sees shares lift

The Myanmar Times - - International Business -

CHAT­TER about a sale of Twit­ter is in­ten­si­fy­ing amid sput­ter­ing ef­forts to trans­form the one-to-many mes­sag­ing plat­form into a prof­itable busi­ness.

Twit­ter shares soared 21.45 per­cent on Septem­ber 23 to close at US$22.62 on un­con­firmed me­dia re­ports of a po­ten­tial sale, with Al­pha­bet-owned Google and Sales­force named as pos­si­ble suit­ors.

The share price gave the com­pany a mar­ket value of $16.13 bil­lion, still well be­low the $26 level when Twit­ter made its stock mar­ket de­but in Novem­ber 2013.

The mar­ket ac­tion came af­ter a re­port by CNBC tele­vi­sion that Twit­ter’s board was favour­ing a sale.

The Wall Street Jour­nal mean­while re­ported that cloud com­put­ing group Sales­force was con­sid­er­ing a deal, and the news site TechCrunch said Mi­crosoft and Ver­i­zon may also be in­ter­ested.

The tech­nol­ogy news site Re­code said Twit­ter was seek­ing up to $30 bil­lion, which could limit the num­ber of bid­ders.

Re­ports have been cir­cu­lat­ing for weeks that the pop­u­lar mes­sag­ing plat­form was open­ing its doors to po­ten­tial buy­ers.

“Twit­ter has been po­si­tion­ing for sale for some time,” tech­nol­ogy in­dus­try an­a­lyst Rob En­derle of En­derle Group told AFP.

“The prob­lem is, since they are not prof­itable, find­ing some­one to ac­tu­ally pay money for them.”

Google and Sales­force were con­sid­ered prime suit­ors for Twit­ter. Mi­crosoft and Ver­i­zon were also on the list of po­ten­tial buy­ers.

“Google and Sales­force could jus­tify the pur­chase,” En­derle said.

Google could ben­e­fit from Twit­ter’s strength in on­line so­cial net­work­ing, but would likely face reg­u­la­tory chal­lenges in an ar­ray of coun­tries.

An­a­lysts have long main­tained that Twit­ter needs to find new ways to boost its ap­peal be­yond a core of celebri­ties, politi­cians and jour­nal­ists, with its user base stagnant for the past year.

In its last quar­terly up­date, Twit­ter said the num­ber of monthly ac­tive users edged up to 313 mil­lion, up 3 per­cent from a year ago and only slightly more than the 310 mil­lion in the prior quar­ter.

Twit­ter has yet to post a profit, even as it has ramped up its ef­forts in ad­ver­tis­ing.

Twit­ter this week eased a 140-char­ac­ter limit on tweets, which was put in place due to mo­bile phone text mes­sag­ing con­straints when Twit­ter launched in 2006.

Twit­ter has also been striv­ing to drive growth by stream­ing live video on its plat­form.

An­a­lysts re­main cau­tious about Twit­ter’s abil­ity to break out of its rut and ac­cel­er­ate growth. It is far be­hind Face­book, which has an au­di­ence of over 1.7 bil­lion, and Face­book-owned Instagram, with some 500 mil­lion.

Last month, eMar­keter said Twit­ter’s share of US so­cial net­work users will de­cline to 28.1pc this year and will con­tinue to drop as it loses users to Snapchat, Instagram and mes­sag­ing apps. –

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