Sierra Elrod
October 19, 2016

Salesforce Won’t Pursue Bid for Twitter

Author:           Yoree Koh and Rachael King

October 14, 2016

Due to struggles to accelerate revenue growth, Twitter Inc. was seeking a combination between themselves and Salesforce.com Inc. Unfortunately, on Friday Salesforce.com Inc. withdrew from negotiations.  Many believe the discussions ended due to Twitters decline in stability both in the stock market and in popular relevance, a long side a nearly $12-billion-dollar price tag.  Following the reversal by Salesforce, Chief Executive Marc Benioff, Walt Disney Co. and Alphabet Inc. both departed, leaving twitter currently with no prospects. 

            In the aftermath of the business software provider Salesforce withdrew, Twitter’s already diminishing expectation for a sale has now reach a new low.  As of Friday at 4 p.m. Twitter stocks fell 5% leaving them at $16.88.  As an incorporation Twitter had not yet given up hope in finding a buyer, yet appears that the company will have to rely on their CEO Jack Dorsey.  Unfortunately, Dorsey has yet to prove he can stimulate growth in a way that can promote an increase in profitability to possible buyers.

          

  Twitter’s second quarter added 1% growth in users giving it a total of 313 million.  Along with the disappointing statistic, Twitter is also on its 8^th straight quarter of shrinking growth with it ultimately dropping 20% in total users.  Due to these disheartening statistics many analysts believe Twitter will have to sell part of the business to survive the $100 million loss in the second quarter.  On October 27, Twitter will be going through another session of tests to examine its reported quarterly earnings.

         

           In the light of these numbers, Twitter’s CEO Jack Dorsey has attempted to create a plan strategically proficient.  So far he has laid off 8% of Twitter’s workforce, and he is currently trying to recruit senior managers and board directors.  He is also trying to make incremental changes to the services offered on Twitter, such as adding “stickers” to photos.  Even with these changes Dorsey is quickly running out of good will with employees even though he has tried to rally the workers though up beat announcements, but this strategy has yet to work amongst Twitter employee who are just looking for a clear strategy to strengthen the weakening company. 

          One of Twitter’s newly developed schemes is to sign deals with athletes and media companies in order to broadcast live events in the hopes to attract mainstream viewers and premium advertising rates.   The plan has already commenced with the signing of online media company BuzzFeed Inc. to stream coverage of the presidential election on November 8.  Yet Twitter’s saving grace may be the 100 million deal signed in April to live stream 10 Tuesday night National Football League games.  Although it appears too soon to judge if the NFL strategy is a successful risk. But it is disheartening that the 3 games which have been broadcasted have only averaged 252,000 viewers a minute, compared to the average 15 million viewers which watch the game on CBS and the NFL Network. Unfortunately, Twitter’s stock has plummeted a devastating 33% on October 5, after it was discovered that potential suitors had once again passed.

I found this article extremely interesting due the fact that Jack Dorsey is stuck in an imposable situation.  Employees and investors are both asking for the answer to the million-dollar question, how can Twitter be redeemed?  He has tried every possible situation from cutting costs, and altering and evolving the product.

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