Dive Brief:
- Twitter's acquisition hopes were further dashed over the weekend with a report from Bloomberg that Salesforce would not be making a bid. Google, Apple and Disney had all backed out late last week.
- The micro-blogging site's stock value was down 13% in early morning trading on Monday, continuing a drop that began with the reports of suitor defections.
- In what now looks like a Hail Mary, Twitter is banking on its live streaming video deals, including partnerships with every major professional sports organization, and the rights to stream 10 NFL Thursday Night Football games this season, per Bloomberg.
Dive Insight:
Losing out on a potential bidding war between Google, Salesforce and Disney is a blow to Twitter’s future as well as a PR hit. It’s now set up to be scooped up with a low-ball bid since the major players are out of the picture.
Twitter has been facing stagnant user growth, and it has missed Wall Street revenue expectations for several reporting cycles. Amid a surprising process that found Twitter an acquisition target for Google, Salesforce and Disney, CEO Jack Dorsey demanded formal bids in front of the micro-blogging platform’s Q3 report later this month, and all three dropped out. Dorsey might have overplayed his hand demanding bids on such a short timeline.
The live streaming video gambit looks to be a make-or-break strategy for Twitter. Bloomberg quoted Robert Peck, an analyst at SunTrust Robinson Humphrey Inc., who said: ““The lack of growth in users and engagement underscore that Jack’s initiatives thus far haven’t really been effective. If this whole ‘live’ idea doesn’t work, then what is it that gets Twitter to grow?”
Twitter has been experiencing some success with live streaming video, building on its existing relationships with TV networks and sports leagues, who are eager to make the most of how viewers are actively engaging on social media during their favorite programs.
However, Twitter faces some big competition in live streaming, especially from Facebook. Whether a wounded Twitter can continue to compete in a space that Facebook has said it is actively pursuing is questionable.
