Why doesn't anyone want to buy Twitter? As the social network's suitors vanish, marketers have their say
When Salesforce confirmed it was no longer interested in a Twitter buyout over the weekend the news all but ended speculation of a sale for the social network.
Why doesn't anyone want to buy Twitter? / #SaveTwitter
The rumour mill has been in overdrive for the best part of a month about who was going to swoop in and take over the platform with Google, Disney and even News Corp touted as interested parties. But now as the dust settles, sources say that Twitter chief Jack Dorsey is now keen to turn his attention to developing a strategy that will offset the brand's well-documented struggle with slumping user growth.
Fresh reports have suggested that Salesforce chief Marc Benioff ruled out a bid on the platform due to concerns around its problem with online abuse and trolling. While its not something Salesforce has publicly commented on, it’s an issue that hasn’t gone unnoticed by commentators.
Despite the perceived negatives, however, it’s clear that Twiter isn’t flogging a dead horse (or bird). The company has sharpened its focus on the real-time element of the site of late, positioning itself as a news sharing outlet and inking a slew of revenue-boosting live-streaming deals to boot.
Twitter is scheduled to reveal its most recent quarterly earnings update on 27 October, and will likely address the matter of acquisition, or its alternatives, then but in the meantime The Drum caught up with some marketers to hear their thoughts on why no-one is snapping up the social network.
'Twitter still has a lot more to give'
James Kirkham, head, Copa90
"We in the media have a tendency to bash the established players and get overly excited about anything new. Twitter is no exception. I’m not sure Twitter is getting no interest right now, perhaps we’re just creating the perception that this is the case. Regardless, claims that Twitter it is effectively worthless are getting louder, and therein lies the comedy, because 'worthless' in technology terms is normally counted in billions.
"Like a footballer reaching thirty and having to adapt their game accordingly, it doesn’t necessarily mean all is lost. After winning the broadcast rights for NFL, the Twitter juggernaut can speed up all over again by owning and dominating the social sports landscape. Twitter still has a lot more to give. With a few smart moves the hype could restart all over again. The platform is woven into the very fabric of our culture - we should cherish and support, not continually knock it."
Alexandra Goldstein, community and content lead, Things Unlimited
"Twitter’s issues with user and revenue growth are well documented. The real-time, public, one-to-many format of the platform is still powerful, but no longer without major competition; Facebook Live and Snapchat Stories alone already threaten Twitter territories from Periscope to Moments.
"Anyone taking on Twitter has to be prepared to invest in shifting to a model that’s a bigger revenue driver – but they could alienate existing audiences in the process. Partnering with platforms, even expensively, could well be seen as a less risky proposition than signing up to reinvent one."
'Twitter’s efforts to expand its horizons are visible in plain sight'
Jerry Daykin, global digital partner, Carat
"Twitter helped create a world of fast moving news in which people often make up their minds from headlines and share entire articles they never bother to read, that may have come back to haunt them.
"While Twitter’s never been in a better place to deliver on marketing objectives (with radically expanded reach, new ways of buying and a hugely improved focus on video) it has been hounded by over a year of bad headlines and those stories can create real concern amongst marketers and ultimately influence advertising decisions. That’s made shareholders nervous and made it a tricky acquisition for anyone to push through the court of public opinion.
"It can perhaps take some solace in the fact that Facebook too went through a similarly oppressive news cycle when it first introduced Promoted Posts and the headlines berated the lack of 'organic reach'. In the long run marketers saw the bigger opportunity and Twitter may find itself much more attractive to suitors when it pushes out the other side of this cycle – the positive reception of its live video offering may be the first step."
Andy Spry, director of biddable activation, iProspect
“Twitter is often compared to the ever-successful Facebook, but the two companies’ financial situations couldn’t be more different. Since going public three years ago, Twitter’s share value has steadily fallen by 60% - in the same amount of time, Facebook’s had gradually doubled - and a look at the numbers shows why.
"At the point of IPO in November 2013, Facebook was making a nine figure profit. Twitter on the other hand reached IPO with a loss of $77M per year, and to this day it has still not turned a profit. In fact, Twitter net loss last year was -$450M. This wouldn’t be a problem if Twitter continued to grow, however usage figures show a stagnant 313M users, with zero growth over the past 12 months.
"For a $20bn asking price, Twitter needs proven net income, and current strategies are not delivering. Countless well-loved brands continue to interact with consumers on Twitter for free, and with huge benefits to their PR when customer communication is done right. Twitter’s real-time nature is however both a blessing and a curse; users’ interest in current news and conversation means that paid-for sales-driven advertising struggles to perform, in comparison to Facebook Ads and Google AdWords. This leaves question marks around Twitter Ads’ ability to fund Twitter’s current operating model, without a great deal more outside investment in the company.
"Twitter’s efforts to expand its horizons are visible in plain sight, with a history of purchasing innovative new startups, and an ever-expanding grasp on different parts of the marketing industry. Investors are likely to sit and wait though until they see improvement in the bottom line."