Twitter, which is on the shelf and waiting for the giants to meet, faces a very serious problem. Informed sources disclosed that Twitter has informed potential bidders and hopes to complete the sale negotiations before the company releases the third quarter earnings report on October 27. However, the original bidders have recently withdrew, and Google, Disney, Apple, and Salesforce have indicated that they have no intention of bidding.
Salesforce CEO Marc Benioff said in an interview with CNBC on Wednesday that Twitter is an exciting product, but clearly its business faces many challenges.
The departure of the buyer caused Twitter's stock price to tumble by 20.1% on Thursday, to close at $19.87, and the market value shrank by nearly $3 billion.
 Why did bidders withdraw?
First, the market performance is poor
Since Twitter's strategic layout in the aforementioned companies is of great significance and it has already been proposed for acquisition early, why did you suddenly leave in the near future? Although spokespersons of Google, Disney, and Salesforce did not comment on this report, all potential Twitter bidders reported falling share prices after they heard news of the acquisition of Twitter. This shows that the capital market is not optimistic about this acquisition.
1. Competitors increase, user volume and monthly growth are weak
In addition to Facebook, its Instagram, WhatsApp, and Messenger brands continue to pose a threat to Twitter. In addition, Snapchat caters to young audiences by adding various interesting stickers and filters to become a newcomer to the social media community. Although the positioning of each app is different, the impact on the amount of users may not be fatal, but each user has limited time on social media. The presence of too many apps will detract from the time and daily activities.
In the second quarter of 2016, Twitter released quarterly subscriber growth. Twitter’s monthly active subscribers reached 310 million, an increase of only 3%, which is an increase of only 8 million from the third quarter of last year. Facebook’s monthly active users were 1.65 billion, an increase of 15%, and Facebook users’ growth has exceeded 200 million in the past 12 months.
2. Sustained losses:
About 90 percent of Twitter’s revenue comes from advertising, so the revenue of advertising determines the survival of Twitter.
The lack of user growth, daily live rate, and dwell time reduced the number of ad impressions.
In 2015, the company suffered a loss of 521 million U.S. dollars. Although the loss amount from 577 million U.S. dollars in 2014 decreased, the balance of payments seems promising. However, it is still unpredictable to turn losses into gains. In 2013, Twitter was listed in New York at a price of $26 per share. In the same year, its stock value once rose to $69 per share, but then fell all the way.
The number of ads that can be displayed each year determines the amount of Twitter advertising, and the effectiveness of ad conversions determines the level of pricing for ad units and whether advertisers are willing to serve on them. Unfortunately, Twitter’s advertising capacity has also been downgraded by advertisers and agents.
3. Low conversion rate
Tom Boutemump, President of Attention, a social media company of KBS, said:
The status of Twitter has gotten worse in recent months. I heard that more and more customers are considering whether they need to keep their own pages on Twitter.
Attention's customers include companies such as BMW, Mattel, and Lincoln Financial.
The current situation is that advertisers pursuing high traffic will go to Facebook, and those seeking new users will choose to launch on Snapchat. Twitter is in a very awkward position.
What is the problem that leads to poor advertising performance?
Twitter's product positioning is not clear, and the target user coverage is too wide. Users with similar attributes of Instagram and Snapchat are more focused.
Facebook, which is also a relatively large coverage area, has a different driving model behind Twitter, resulting in different conversion rates.
Unclear positioning is easy to understand and product attributes are determined.
And its difference from Facebook's ad-driven model is worth considering:
Facebook is based on real-name system + friend chain, and like feedback mechanisms such as like to get the user's personal preferences, can more fully draw the user's portrait, so that Facebook can push more accurate "custom" ads for users. In addition, Facebook advertising is based on strong relationships and is more conducive to word-of-mouth marketing: the forwarding or participation of acquaintances and friends is more likely to arouse users' curiosity and trust in a product.
In contrast, Twitter clearly lags behind Facebook in the establishment of user portraits and strong relationship chains.
People may have a problem here. Why did Sina Weibo, which is similar to Twitter products and advertising drives, continue to see rising revenue in recent years?
First, Sina Weibo has relatively few competitors in the domestic social field. Secondly, Sina’s Weibo, which was funded by Ali, has been fully integrated in user data, advertiser resources, and ad exchanges. This is something that Twitter cannot match.
Second, not only user growth and profitability issues
According to industry analysts, Twitter’s user growth and profitability issues are the biggest reasons for potential buyers to withdraw, but these issues have already been realized by the acquirers, and their acquisition purpose is more to obtain complementary resources from Twitter through Twitter, not Make use of its original business profitability. There are other downside factors that hinder the acquisition.
1. Twitter internal views are not uniform
According to informed sources, Twitter CEO Jack Dorsey has repeatedly stated that he is not ready to sell Twitter:
Twitter should continue to follow the current trajectory while benefiting from improved products and success in the live video field.
Co-founder Evan Williams prefers to sell Twitter, and other members of the board believe it should be sold.
Even if the opinion of Twitter internal executives cannot be reached, it is reasonable for the purchaser to withdraw from the acquisition temporarily.
2. Investor pressure
It is reported that potential buyers may have plans to acquire, but the investors behind them do not allow them to do so.
This week at the Salesforce Shareholders' General Meeting, several investors put pressure on Salesforce CEO Mark Benioff to be dissatisfied with the idea of ​​buying Twitter. As early as September 23, Salesforce plans to acquire Twitter news, the company’s shareholders Wall Street hedge funds and public funds began to question the rationality of this transaction. Shareholders are obviously not optimistic about the deal.
 How is it that Twitter is "disgusted"?
Informed sources disclosed that Twitter is considering stripping non-core assets and at the same time launching a live broadcast service.
Two CEOs' "Live Imperial Dream"
Dosibu’s Twitter CEO, Dorsey, is not encouraged to see the bidder leave. The mood should be most exciting at this time. Tosi repeatedly claimed that the live broadcast will be the next highlight of Twitter. Now, he has enough power to go for it and be confident. When asked how to look at Facebook's march into the field of live video, Dorsey confidently responded to "We have been doing it for a decade."
The live broadcast is not only conducive to gathering new users, but the live broadcast as a medium for video is more conducive to implanting native advertisements with better experience and superior performance. In addition, live streaming can also generate revenue through value-added services.
In addition to the current CEO Duo Xiwai, Twitter's former CEO Dick Costello is also very optimistic about the live broadcast business:
Today, it seems that Twitter is only a small town to a certain extent, and a large number of users are flooding into this large city of Facebook. However, as the Twitter team continues to launch new services such as live streaming, Twitter Moments, Vine, and Periscope, it attracts not only old users but also new users who are constantly joining.