Media Moves and News

Coverage: Disney mulls bid for Twitter

September 27, 2016

Posted by Chris Roush

Disney-logoWalt Disney Co. is considering making a bid to acquire social media company Twitter, multiple news organizations reported Monday with various reasons why the deal would, or would not, work.

Alex Sherman and Sarah Frier of Bloomberg News had the details:

After receiving interest in discussing a deal, Twitter has started a process to evaluate a potential sale. Salesforce.com Inc. is also considering a bid and is working with Bank of America on the process, according to other people, who asked not to be named because the matter is private.

Representatives for Twitter and Disney didn’t respond to requests for comment.

Speculation that Twitter will be sold has been gathering steam in recent months, including last week’s news of Salesforce’s interest, given the social-media company’s slumping stock and difficulties in attracting new users and advertising revenue. Disney, the owner of ABC and ESPN, could obtain a new online outlet for entertainment, sports and news. Jack Dorsey, chief executive officer of Twitter, is on the board of Disney.

Twitter rose as much as 2.1 percent to $23.09 after being down earlier. The stock soared 21 percent on Sept. 23 following reports of the talks with Salesforce. Disney fell, dropping as much as 2 percent to $91.40.

“It’s a video distribution play,” said James Cakmak, an analyst at Monness Crespi Hardt & Co. “What Disney has to think about is what is its place in a post cord-cutting world. They are investing in technology for distribution — and this would give them the platform to reach audiences around the world.”

Will Oremus of Slate reports why no one should be buying Twitter:

The straw-grasping for synergies highlights a fundamental problem with the notion that the solution to Twitter’s problems is new ownership. For Twitter to be worth anything resembling its present market value, it has to evolve into something with broader global appeal than it holds today. And it has to become a profit engine in its own right, not just a cross-promotional tool for some other corporate division that makes money.

Google and Facebook are the only potential buyers that make much financial sense, because they’re the only ones big enough to buy Twitter that know how to make money via online advertising. (They also might be the only ones equipped to harness the company’s personal data.) But both have very different cultures and philosophies than Twitter, and both deals would raise big antitrust flags. They’d also be buying the very kind of troll problem that they’ve both been trying desperately to avoid.

With all the people who use and love Twitter every day, you’d think there must be a way to squeeze some more revenue from it. Surely there is, and it’s fair to criticize Twitter for not having found it yet. But a big part of the reason Twitter has moved slowly is that the company has a genuine commitment to its original vision for a real-time social feed that can connect anyone to anyone around the world, without preemptive mediation by editors or algorithms. Jack Dorsey returned to the permanent CEO role less than a year ago. It’s fantasy to suggest that a new owner could come in and solve the platform’s problems faster than that without sacrificing what people like about it.

Peter Kafka of Recode writes why Disney won’t end up acquiring Twitter:

Here’s the biggest issue: Once Disney takes control over Twitter, how can Twitter possibly work with any other content company — the kind Twitter needs if it wants to be a video company?

If you want Time Warner, or Viacom, or even BuzzFeed to send you their stuff, you can’t do it if you’re owned by a major rival.

That is, you can’t anymore.

You could in the old world, if you were a cable company, and you had a distribution monopoly, and anyone who wanted your customers’ eyeballs had to go through you.

But that world is going, going, gone, which is why Disney is in the place it’s at right now.

Subscribe to TBN

Receive updates about new stories in the industry daily or weekly.

Subscribe to TBN

Receive updates about new stories in the industry.