iStock/Thinkstock(NEW YORK) — During the last two weeks, there have been a number of reports that a handful of tech and media companies may be preparing to make bids to take over Twitter.
The party being mentioned as the most likely potential buyer is the San Francisco-based cloud computing company, Salesforce. Other names that have been thrown around in reports citing anonymous sources include Google, The Walt Disney Company and Apple. (The Walt Disney Company is the parent company of ABC News.)
Some reports have suggested that Google, Disney and Apple aren’t likely to bid.
Twitter did not respond to requests by ABC News for comment, and the company has remained silent on the topic since reports of possible bids first surfaced on Sept. 23. Disney, Google and Apple did not respond to ABC News’ request for comment.
Amid the speculation, one question that we can get an answer to is why anyone would want to buy Twitter when growth at the social network has been tepid at best.
In fact, in one recent quarter, the number of monthly active users dipped. Revenues have also struggled, dipping a whopping 16 percent from the fourth quarter of 2015 to the first quarter of this year. Its year-over-year revenue has grown, albeit at a slower pace than before.
It’s a struggling company that has had trouble growing, even as its competitors have expanded.
So, why would anyone want to buy it? The answer is all about how Twitter’s data and user base could aid the acquiring company’s existing business.
Twitter “offers an enormous amount of data about what people are looking at, talking about. It’s a tremendous way to discover trends as they’re happening. There’s just a staggering amount of information that can be gleaned from Twitter posts,” Bob O’Donnell, chief analyst at California-based technology market research firm Technalysis, told ABC News.
And that can matter for the companies that may be in the market to buy Twitter.
For Salesforce, whose primary business is customer relationship software, having access to the user data could allow it to boost the software it already sells, James Cordwell, an Internet analyst at Atlantic Equities in London, told ABC News.
But for Google, it’s all about advertisements. The search engine giant makes money through advertisements that are targeted at users so that they are relevant to their interests and searches.
“Twitter’s appeal to Google is probably that it offers another location for Google to place its highly targeted ads,” Cordwell said.
And, according to O’Donnell, it would also provide Google new data to target those ads with greater precision.
But the other big rumored bidder probably isn’t looking to develop or enhance software.
For Disney, a major media company, it’s another way to get its content in front of eyeballs, Cordwell noted.
Regardless of the benefit that Twitter would bring to them, any company that buys Twitter has a big challenge in front of it: righting the ship.
“I think it will be somewhat challenging to turn it around and make it profitable,” O’Donnell said of Twitter. “There’s going to have to be a willingness to make some changes that people fear go against what was the heart of what Twitter was about.”
As the social network operates right now, “it’s hard to use, it’s hard to learn, it’s not logical for a lot of people,” he said.
But that challenge might be too steep for some.
Referring to reports that some companies were backing away from making a bid, Cordwell noted that “it seems these interested parties are concluding that the benefits are not sufficient for them to be willing to take on that challenge.”
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