Twitter is (un)officially up for grabs but it’s failing to get a formal bid in place. Their situation is not entirely unexpected to us but may come as surprising to anyone who uses the platform regularly.
At a price tag of $18 billion, which puts it $1 billion short of Facebook’s $19 billion WhatsApp acquisition back in 2014, Twitter has valued itself as one of the top players in social media, a valuation many may view as unjustified.
According to Bloomberg Twitter has engaged Goldman Sachs, a global investment banking, securities and investment management firm to deal with any informal interest and develop and structure a potential deal that could lead to a successful formal bid.
In the last month, rumours circulated that either SalesForce, Alphabet (Google), Microsoft, Disney Co. (yes, the real Disney) or Microsoft would be looking to buy the micro-blogging site but nothing of the rumours has materialised yet.
So out of interest we decided to look at some reasons why Twitter may be struggling to find a bidder:
The price is too high
When it comes to negotiating a deal the first thing a buyer looks at is the cost of the deal. In tech, a huge emphasis is put on the potential value the platform shows in future monetization. In the case of Twitter, its valuation comes at a time when the company has been widely reported as struggling. An interesting article by Financial Times attributed Twitters struggles (among other reasons) to:
- Failing to attract new users
- Failing to retain existing users
- and Failing to find a solution to effectively monetize its activity
These 3 reasons are enough to put off any potential buyer.
Hate speech & trolling
Anyone who has used Twitter knows that it is not the most pleasant space. There is so much hate speech floating around Twitter many of its users tend to stay away from active engagement.Twitter is a hive of Trolling, there are many members who are on it simply to antagonise and push your buttons. The way Twitter is set up has put a real dent on its appeal and the cause of many people abandoning their accounts or choosing not to get involved.
Then, there are the extremists. So often we here of an “ISIS” member tweeting hate speech directed at the Western world or promising some kind of Terrorism. Twitter has had to re-look its censorship rules. Initially, Twitters stance was:
…we do not actively monitor and will not censor user content, except in limited circumstances…
But that quickly changed to:
We believe in freedom of expression and in speaking truth to power, but that means little as an underlying philosophy if voices are silenced because people are afraid to speak up. In order to ensure that people feel safe expressing diverse opinions and beliefs, we do not tolerate behavior that crosses the line into abuse, including behavior that harasses, intimidates, or uses fear to silence another user’s voice.
Now, what company would want to have the headache of dealing with such sensitive issues? Disney already pulled out citing the content on the platform is too abusive and goes against their company values.
Twitter is hard to understand and use for a lot of people
Twitter requires some form of mastery to really understand what’s going on. The platform is real-time in nature so if you miss out on something you have really missed out on it. The only way to stay connected is through trending hashtags, which gives you the sense of community.
Besides hashtags twitter is really a confusing place, this proves to be a bit of a problem as businesses won’t put emphasis on twitter as their tweets simply come and go. This is very different to Facebook’s model where posts grow over time and reach more people according to the interest shown in it.
I remember trying to explain Twitter to my parents and it was a tough task. I still have to manually follow people for them based on their interest, for them, Twitter is totally different to what Twitter is for me.
Twitter is too serious
In as much as people may try to personalize their accounts Twitter remains a serious place for critical analysis of varying topics. Basically, it’s a political space. Most Zimbabweans joined Twitter as it was the only uncensored place to get a dose of political and social issues impacting our lives. Added to the appeal of hearing it from “the horse’s mouth” Twitter gave most people an opportunity to voice their opinions directly to the interested parties.
But, in as much as this is a great thing, Zimbabwe’s affinity towards twitter is not shared across the world. The world wants to be entertained not educated. Instagram shows you life in pictures where you can flaunt your wealth and achievements, Facebook shows you people’s lives in a more family and friendship-oriented way, Snapchat has a see what I’m doing now approach and LinkedIn is a “these are my achievements so hire me” space which leaves Twitter in a very peculiar position.
It’s not to say Twitter hasn’t realized this, they have embraced the fact that they are a political space!
The case of Twitter failing to find a buyer is quite complex as you may have realized by now. The buyer would have to really find interest in the company and willing to impact a vision to lead new strategies and models. There will be more cleaning house than expected of an established brand like Twitter.
Twitter may have left it until too late and may actually not find a buyer. It is their mistake of allowing their platform to remain largely unorganized, a baby they would probably have to deal with on their own instead of passing on responsibility. Will Twitter clean up its mess before it’s too late? Only time will tell, but for this year we think its safe to say Twitter is going nowhere.