The Walt Disney Company is evaluating a potential bid for Twitter, Bloomberg reported on Monday, citing people familiar with the matter. After receiving interest in discussing a deal, Twitter has started a process to evaluate a potential sale.
Speculation that Twitter will be sold has been gathering steam in recent months, including last week’s news of Salesforce’s interest, given the social-media company’s slumping stock and difficulties in attracting new users and advertising revenue. Disney, the owner of ABC and ESPN, could obtain a new online outlet for entertainment, sports and news. Jack Dorsey, chief executive officer of Twitter, is on the board of Disney.
“Twitter was positioning for sale for some time,” technology industry analyst Rob Enderle of Enderle Group said. “The problem is, since they are not profitable, finding someone to actually pay money for them.”
Analysts have long maintained that Twitter needs to find new ways to boost its appeal beyond a core of celebrities, politicians and journalists, with its user base stagnant for the past year. In its last quarterly update, Twitter said the number of monthly active users edged up to 313 million, up three percent from a year ago to only slightly more than the 310 million users in the prior quarter. The company has yet to post a profit even after ramping up advertising efforts.