Things looked up for Twitter after rumors surfaced that several large companies such as Salesforce, Verizon, Microsoft, Google and parent company Alphabet, and Disney were interested in buying it. The microblogging site’s stock surged and investors were happy at the prospect that the long-suffering company soon may be able to make money instead of losing it.
But those hopes dissipated as quickly as they manifested now that the three main prospective buyers — Google, Disney, and Salesforce — withdrew their tentative bids. Alphabet was the first to bow out earlier this month but didn’t specify its reasons. The move caused a steep 9 percent stock drop. Salesforce and Disney followed suit this week, and those two reportedly made the move in response to Twitter’s harassment problem.
“I know that the haters reduce the value of the company… I know that Salesforce was very concerned about this notion.”
According to a recent Bloomberg report, Disney executives believed Twitter harassers would taint the child-friendly entertainment brand’s image. Salesforce executives felt similarly, according to CNBC’s top stocks analyst Jim Cramer. Cramer cited a conversation he had with Salesforce CEO Marc Benioff, saying the company was wary of Twitter’s harassment problem.
“What’s happened is, a lot of the bidders are looking at people with lots of followers and seeing the hatred,” Cramer said on CNBC’s Squawk on the Street. “I know that the haters reduce the value of the company… I know that Salesforce was very concerned about this notion.”
Twitter has been struggling to turn its image around, and is plagued by criticism of rampant online abuse and an inability to increase user engagement despite rolling out new features including live-streaming events.
A sale was thought to be among journalists and industry insiders to be the panacea that would make the company profitable. But buying Twitter means taking on all of the problems it hasn’t been able to eliminate — stagnant user growth and engagement, abusive users, and failed initiatives. Even the company’s recent improvements to abuse-reporting tools and streaming deals with the NFL and media organizations weren’t enough to convince these investors that a takeover would be worthwhile.
A total of 2.6 million anti-Semitic tweets were sent to journalists who voiced critical opinions about Trump in 2016 https://t.co/GWGmZ4Hv7d
— Reza Aslan (@rezaaslan) October 19, 2016
Recent events may finally force the company to make seismic changes to make itself more palatable to investors. Twitter’s hateful culture has become a highlight of the 2016 presidential election, thanks to Donald Trump’s campaign and supporters. A study found that Twitter accounts belonging to white nationalists, who overwhelmingly favor Trump as their presidential candidate, outnumber those associated with the Islamic State. Additionally, a recent Anti-Defamation League report found that anti-Semitic tweets have spiked this year, and that 83 percent of those threats target just 10 individual journalists.
The rise in anti-Semitism caused New York Times editor Jon Weisman to ditch Twitter after he received hateful messages from users linked to the alt-right, a fringe extremist group that adopts white supremacist and neo-Nazi values. Actress and comedian Leslie Jones also suffered a barrage of racist and sexist tweets linked to alt-right and Trump supporters, which caused Twitter CEO Jack Dorsey to step in.
Dorsey, who says he never checks on Twitter’s stock, is backed into an even tighter corner following this week’s botched acquisition bids. Investors and employees are calling his leadership into question. In a Bloomberg report, Dorsey’s leadership style was described as more philosophical than pragmatic.
Dorsey hasn’t seemed interested in being the sole authority on Twitter’s future, according to insiders. While he was away from Twitter, he built a credit-card reader company, Square Inc., and learned the importance of trusting others with strategic decisions. His leadership style in the past year at Twitter has been Socratic, not prescriptive, these people said. He’ll ask open-ended questions to spark debate, like, “Are we preventing people from expressing themselves fully with our 140-character tweet limit? What would a different solution look like?“
The discussions eventually lead to solutions, like Twitter’s move last month to exclude photos and attachments from a tweet’s character total. But the process takes time. And that passive, contemplative style created a void in management…
The report concludes by suggesting that Disney would be Twitter’s best hope for revival as the company shifts to incorporate different forms of media. But with Disney and the other bidders in the wind, Twitter is going to have to do an about-face — starting with rectifying its reputation as the host of widespread online abuse — if it wants to save itself.