Twitter has held preliminary discussions with Google and Salesforce about a potential deal to buy the social media pioneer, according to people briefed on the talks.
The San Francisco-based company — known for its little birdie symbol and its 140-character tweets — has been working for several weeks with Goldman Sachs and Allen & Co to explore a sale of the company, valued at nearly $16bn on Friday, those people said.
Goldman has also contacted a number of global media companies to gauge their interest in a potential deal but none have expressed serious interest.
Technology analysts say media companies such as Fox, Comcast, CBS and Walt Disney could be potential buyers of the site, which recently reclassified itself as a news app in the app store.
Twitter’s shares rose 20 per cent to $22.82 on Friday after CNBC reported that it was in early stage talks with Google and Salesforce. Before the report its market capitalisation was about $13bn. Salesforce shares were down 5.6 per cent by early afternoon Friday.
Twitter, Salesforce, Google and Goldman declined to comment.
Vala Afshar, Salesforce’s chief digital evangelist, said in a personal tweet: “Why Twitter? 1 personal learning network 2 the best realtime, context rich news 3 democratise intelligence 4 great place to promote other.”
Speculation about a sale has swirled around Twitter for several months as the company has struggled to meet expectations for user growth. Beloved by journalists, professionals and celebrities, the site has struggled to win over a broader audience who have been reluctant to chronicle their own lives and stuck to rival social media platforms.
Goldman helped the company go public two and a half years ago and Anthony Noto left the US investment bank to join Twitter as its chief financial officer. It is unclear whether the adviser has an official mandate from Twitter to sell the company.
Robert Peck, an analyst at SunTrust Robinson Humphrey, said a deal could be necessary for Twitter as the company struggles with slowing user growth.
“If the current trend of meagre user and engagement growth remains, we think it’s inevitable that Twitter will need to pursue M&A alternatives,” he wrote in an analyst note.
Twitter’s stock has tumbled since it hit an all-time high of $69 a share in January 2014, a few months after it went public at $26.
Back at the time of its initial public offering, investors hoped it would be the next giant social platform after Facebook. Facebook has a market capitalisation about 24 times larger than Twitter, while social app Snapchat also has a higher valuation on the private market.
Although Twitter’s user base will continue to grow, its share of worldwide social network users will remain virtually unchanged at about 12 per cent, according to eMarketer, a digital research company.
