Twitter must feel like Cinderella right about now.
A report from Bloomberg today (Sept. 26) suggests that the bidding war for Twitter is heating up, as the Walt Disney Company is said to be considering a bid for the social media site. After news initially broke Friday that the company had received interest from prospective buyers, including Salesforce, Google’s parent company Alphabet, and a joint venture between former Microsoft CEO Steve Ballmer and Saudi prince Alwaleed bin Talal, the stock shot up roughly 20% in pre-market trading. Today, Twitter is up another 1% or so to just shy of $23—the highest the stock has reached since December 2015.
Twitter’s market capitalization is now roughly $20 billion—or about five times what Disney paid for the massively successful film house Lucasfilm, the creators of the Star Wars franchise—and although the move would likely be a pricey one, it could potentially align with where Disney is looking to expand.
Along with owning Star Wars, Marvel Studios, and pretty much every piece of animated nostalgia that millennials and Generation Xers have, Disney also owns the ESPN and ABC networks. ESPN is the most expensive cable channel on US televisions, and Disney is starting to contend with the idea that it may soon have to offer the sports network as a standalone online subscription package as more and more households cut the cord on cable TV subscriptions. ESPN uses a company called BAMTech, a streaming service created in part by Major League Baseball, to live-broadcast matches and shows online. Disney invested $1 billion into the company in August.
Twitter has been searching for a way to grow and make money off of its stagnant user base for years, having ceded ground to other social networks including Instagram, Facebook, and Snapchat—all of which now have more users than Twitter. The company has in recent months decided that live broadcasts could be the solution. Its first broadcast over the summer was the Wimbledon tennis championships, and it signed a deal with the National Football League to broadcast 10 games this season. The social network will also broadcast the first US presidential debate between Hillary Clinton and Donald Trump tonight.
Twitter has also been using BAMTech to stream its live events, so a tie-up with Disney would make a lot of sense. Imagine the cross-promotion potential for an MLB game on ESPN that you can start watching on the train on Twitter, switch over to ESPN at home, and then jump back onto Twitter to read what your friends and pundits are saying. When Disney released the latest Star Wars film, The Force Awakens, last December, it released certain trailers on Twitter first—perhaps in a Disney-controlled future, Twitter could be the place to go for exclusive Star Wars or Marvel content, which fans can then discuss right from the video page.
That being said, even though current Twitter CEO Jack Dorsey sits on Disney’s board, it seems that Disney’s investors are not thrilled about the idea of buying a very expensive company that is getting beat by its rivals, isn’t attracting new users, and has had slowing growth for multiple quarters: