Talks of a Twitter Inc (NYSE: TWTR) acquisition have
been circling in the last week, with rumored acquirers including salesforce.com, inc. (NYSE: CRM) and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL). On Monday, Walt Disney Co (NYSE: DIS) is said to have hired a financial advisor to look into a potential acquisition of
Twitter.
A recent Quora thread* asked if Disney should buy Twitter.
Disney Builds, Controls And Merchandises Stories
According to one user, Rupert Baines, "Any organization that buys a company that used to have Steve Jobs as CEO and take it to
greater success cannot be said to be bad at managing tech. But Disney's strengths are in building stories, and then controlling
them and merchandising them. And it does that phenomenally [emphasis omitted] well. Including in tech. But that isn't Twitter."
Related Link: NFL Ratings Are
Slumping, But Twitter's TNF Live Stream Grew 34%
Disney Tried Something Similar Before
Another user, Tom Peracchio, brought up Disney's former attempt to create an online community in the late 1990s called "The Go
Network."
"In 1998, Disney created The Go Network to be a directory, trying to be a search engine, trying to be a community. They wanted
to be the web portal that people used when they started up their browser. You would think with all the Disney resources, along with
content from ABCNews and ESPN, they were sure to be successful. They weren't. Roughly three years after launching The Go Network as
a web portal, Disney gave up on the idea."
There's Too Much Innate Conflict
According to Quora user Phil Jones, "Tech and media companies have inherent conflicts of interest that eventually ruin them.
(See Sony Corp (ADR) (NYSE: SNE) for the
classic example.)"
Bottom Line: 'Highly Controversial' Doesn't Mean Improbable
While a takeover from Disney would be highly controversial, Twitter's CEO is a Disney board member fueling fire to the
speculation. Disney's recent Bamtech acquisition, the technology used in Twitter's Thursday Night Football live stream, is also a
catalyst for the takeover as Twitter doubles down on streaming live events.
Disney CEO Bob Iger, speaking at Goldman Sachs Communacopia conference, defended ESPN's decline, saying new entrants to sports
broadcasting competing against the current owners of sports broadcasting rights, specifically referring to Disney's ESPN.
"Nobody can monetize sports better than ESPN" new entrants have the capital, but would dig deep into their pockets and do
something that would be a loss leader and then some. It's gonna be hard for them to compete on an equal playing field, no pun
intended," said Iger.
*Responses have been edited for length, clarity.
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