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Twitter Acquisition Pending? A Snap Analysis

Back in June most of us got surprised by the news that Microsoft has acquired LinkedIn. Neither of us deemed this a bad move from a company point of view. There are just too many potential synergies between MS Dynamics CRM, Office365, Azure on one side and LinkedIn, as the leading business network on the other. At that time many of us, including myself, were musing about when Twitter will be acquired, and by who.

My initial guesses have been Apple or Google, then suggesting SAP to have a look into it. Thinking of it I could have added Oracle, IBM and Salesforce or media companies including telcos into the mix. In brief, a lot of companies should be interested in the treasure pit of data, behavioral data, that Twitter holds.

Why? There are multiple reasons. Twitter is the last remaining independent social media outside Facebook and the big Chinese ones that the big western companies will not get access to; Tencent, Alibaba, Momo, etc. are rather buying it themselves than being for sale (to a western company), Facebook doesn’t need to. Twitter has a profitability and growth challenge, but an interesting technology and, importantly, is a great source of real time information about a lot of topics, from business to consumer.

All this makes Twitter extremely interesting, especially in times and ages where data becomes the fuel of business.

Yesterday, on 23/09/16 several news outlets, including ZDNet, SiliconAngle, The Verge, Slashdot, USAToday and others, broke the news that a number of companies, notably Salesforce, but also Microsoft, Google, and Verizon, are in talks with Twitter, which are at one stage or another. So far Salesforce seems to be in the lead. As we know Salesforce was the party that lost out in the LinkedIn deal, where Microsoft shelled out staggering 26 billion dollar. Rumor is that Twitter’s price tag is even at $30 billion, which suggests competitive bidding – or a distorted sense of reality on Twitter’s side. Regardless of whether recode’s original estimation of $18 billion or something at $30 billion or beyond is closer to being true – it looks like it takes deep pockets to get Twitter. If you ask me, it is worth neither number, but that is a different topic altogether.

Price tag aside I am still convinced that any company that offers, and wants to continue to offer, a leading customer engagement solution and/or CRM suite, can take a lot of advantage of the firehose of information that Twitter is. Combine this with leading edge analytics like Einstein that just got delivered by Bob Stutz’s teams or Oracle’s AI – or SAP’s, for that matter -  and you have a very interesting case.  The same holds true for telcos and media companies, that generally merge their fields of business as the provision of the communications infrastructure gets more and more commoditized.

My PoV

To me it makes perfect sense that Salesforce (and allegedly Microsoft) are after Twitter. For the big business application vendors Twitter is perhaps the last chance to get hold of real time and real life data, offering new and additional data driven services to their engagement and service solutions via their analytics engines. Twitter’s data stream complements the AI and machine learning endeavours of these companies, too. In brief: If Twitter goes to a business applications vendor, the other ones will lose out. If the successful bidder is not called SAP or Salesforce, it is a big time lose! Microsoft already has LinkedIn, so would not really suffer although could get a really commanding position if owning Twitter, too! Oracle seems more intent in competing AWS on the infrastructure level at the moment, so they wouldn’t feel the pain as much, although they should …

SAP? SAP now has very competitive CRM side solutions again, has leading analytics, and also has started to look into the Data as a Service business.

In my eyes SAP would suffer.

A lot!

The cards are different in case a telco/media company, or IBM, or one of the Chinese giants wins. The first two possibilities would potentially level the playing field for the business application vendors (and give SugarCRM a good position, if IBM happened to be the one) and the latter would just change the dynamics of the Internet. Well, that one is hypothetical, anyways.

Ah, yes, before I forget: A price tag north of $30 billion is in the realm of hard to recover. It will be interesting to hear what the shareholders of the ‘winner’ have to say in the case of this type of price.


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