Salesforce, Google may be interested in buying Twitter

Shares of Twitter Inc. surged Friday after reports that the social media company could receive a formal bid soon.

Citing unnamed sources, CNBC reported that Twitter has received “expressions of interest” from several tech companies and was “engaged in conversations with potential suitors.”

Those companies are said to include Google and cloud computing software firm Salesforce.com Inc., according to CNBC.

On Wall Street, Twitter stock closed up $3.99, or 21.4%, at $22.62. The company’s market capitalization is $15.9 billion, according to Factset.

Twitter and Google did not immediately respond to requests for comment.

A Salesforce spokeswoman said in an email that the company does not comment on “rumors or speculation.”

San Francisco-based Twitter has often been the target of takeover speculation.

The company has struggled to increase its user base, and has tried to expand its platform by increasing its live streamed sports coverage.

In April, Twitter signed a deal with the NFL to live stream Thursday night football games. The company followed this up with an agreement in July with the Pac-12 Networks to live stream at least 150 conference games during the 2016-2017 school year.

Twitter has also signed a deal with the NBA that would allow the company to stream two new, exclusive shows and additional video.

These plans were unlikely to jump-start user growth, but they could help bolster brand awareness or drive revenue. And Twitter’s potential profitability is likely what’s attractive to possible suitors, said Michael Pachter, research analyst at Wedbush Securities.

Though Twitter might not seem like a natural fit with any of the rumored suitors, Pachter said companies could try to integrate it into existing platforms. Salesforce.com, for example, might see a fit with its customer database management software.

In a tweet Friday morning, Salesforce executive Vala Afshar said Twitter was a “great place to promote others” and “the best realtime, context rich news.”

Later, he noted that he has tweeted his “personal views regarding ‘Why Twitter?’” several times over the last few years. “I simply love Twitter,” he said.

Investors apparently didn’t share Afshar’s views. Shares of Salesforce dropped $4.20, or 5.6%, to $70.39 at the close of Friday trading on Wall Street.

“Because of the size of the deal that would be required, because of the nature of the way you would fund it, there’s a real fear that not only is Salesforce reaching into things it does not understand, but it would cause a true, meaningful distraction to the core of its business,” said Alex Zukin, managing director and equity research analyst at Piper Jaffray.

“I think there are many intelligent moves for Salesforce to make from an M&A perspective that would be more relevant [and] understandable than buying Twitter,” he said.

Google, with its strong advertising platform, makes more sense, Pachter said. Google’s engineers could make Twitter easier to use, which could drive user growth, and its sales team could increase advertising opportunities, he said.

“Twitter certainly has value if someone runs the company to maximize profitability,” Pachter said.

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UPDATES:

1:25 p.m.: This article has been updated with final stock prices.

12:11 a.m.: This article has been updated throughout with additional details and with an analyst’s comments on Salesforce’s interest in Twitter.

8:55 a.m.: This article has been updated with an analyst’s comments.

This article was originally published at 7:45 a.m.