With Valuable Data, Twitter Inc Buyers Will Get Problems As Well

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Twitter’s valuable data may be of great help to companies and buyers eyeing the micro-blogging giant and may pay more than $16 billion to get the data. However, with the data, the companies will inherit challenges as well, like slow growth, an unsolved identity crisis and management turmoil, notes Bloomberg.

Twitter acquisition comes with a set of problems

“While it remains a destination for conversation among influential people, Twitter would be tough to digest,” says Bloomberg.

Jack Dorsey, chief executive officer and co-founder, may not come with the acquisition as he is the CEO of Square as well. Last year after an extensive search, the company put Dorsey in charge. Twitter’s product team has already gone through at least five heads in six years, and more strategic changes mean more valuable employees leaving, notes Bloomberg.

Twitter is reportedly considering a sale because of lackluster growth. In the United States, Twitter’s user base has declined for six straight quarters. In addition, advertisers are not spending much because they cannot justify purchasing more ads if the audience is not growing. Twitter is losing its audience fast as Snapchat, Instagram and Facebook take on similar roles in society.

Recently after surveying advertisers, RBC Capital Markets analyst Mark Mahaney noted that Twitter’s value proposition to could be waning. Also the micro-blogging giant is in the middle of an identity makeover that could change it into more of a media company than a tech company.

Salesforce weighing a Twitter bid?

Takeover speculations about Twitter have again gained ground. Salesforce.com Chief Executive Marc Benioff, who built the company to challenge Oracle and Microsoft in selling software to firms and businesses, is now reportedly weighing a bid for Twitter. This move would push Benioff’s 17-year-old company into a new place with very different risks and challenges, notes the WSJ.

Benioff’s growth strategy could benefit from Twitter’s vast source of valuable data on 313 million monthly users, as companies are increasingly using messaging services like Twitter to communicate directly with the public via customer service support.

Brandon Purcell, an analyst at Forrester Research, said, “Twitter is a gold mine of customer insights,” adding that Salesforce still needs access to external sources even when it has generated its own treasure trove of data.

On Friday, Twitter shares closed up 21.42% at $22.62. Year to date, the stock is up almost 2%, while in the last year, it is down almost 11%.

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