Twitter faces serious challenges for transfer of business. The confirmed source indicated that Twitter acknowledged the potential bidders to finish the negotiation by October 27. However, there are reports showing that the previous bidders quit offering, including Google, Disney, Apple and Salesforce.
Marc Benioff claimed when was interviewed by CNBC on last Wednesday that:” Twitter is an exciting product, yet it faces lots of challenges in business.”
Twitter share dropped by 20.1% last Thursday, closing at $19.87. Twitter’s capitalization value was shrunk about $ 3 billion.
Besides Facebook,its subordinate Instagram, WhatsApp and Messenger pose threats to Twitter. What’s more, Snapchat became a favorite app among the youth contributed to its funny tags and filters. Though different app has different aim, the usage of each social networking app is limited for users.
Twitter announced its users growth in Q2, it had 310 million monthly active users then and only increased by 3%. That’s, it only increased 8 million users from Q3, 2015 to Q2, 2016. Facebook had 1.65 billion monthly active users, increased by 15%. Its users increased by 200 million in past 12 months.
Twitter has been losing money in revenue. About 90 percent of its revenue was from advertisement. It lost $521 million in 2015. The issue price of Twitter share was $26 in 2013, increased to $69 some time in the same year. Then its share keeps declining.
The low conversion ratio of Advertising is also a reason for the situation that Twitter met. Twitter products aim at a large scale of users instead of specific ones. Instagram and Snapchat aim at particular users which led to success.
Twitter directors hold different opinions for the transfer of business. Some of the officers are unwilling to sell its business. They did not make an agreement in this aspect.
Potential bidder also faced pressure from its shareholders. Several investors expressed the unwillingness to acquire Twitter to Marc Benioff at its general meeting of shareholders. They did not feel positive towards this acquisition.