(TechCrunch) Why Salesforce might be interested in Twitter

Why Salesforce might be interested in Twitter

Rumors were flying all day yesterday that Twitter is up for sale, and Salesforce.com could be a chief suitor. At this point, with so many possible bidders being reported, it’s hard to know what’s going to happen (if anything). But the big question for many is why Salesforce would even be interested in the consumer-facing social network.

While nobody could say with certainty that the deal would happen, most of the industry experts we spoke to believe that if Salesforce were to win this deal, Twitter would be an excellent fit.

R Ray Wang, principal analyst and founder at Constellation Research, says that for him it’s about the battle for what he calls ‘the relationship graph’ where the consumer graph and the enterprise graphs converge. “This is what made LinkedIn so attractive to both Microsoft and Salesforce. The graph is activated by artificial intelligence (AI) and this is why there is mass interest. Twitter, like LinkedIn, provides a very large and active graph,” Wang explained.

That AI component could be key. Just this week, both Salesforce and its chief rival Oracle announced major AI initiatives with Salesforce announcing Salesforce Einstein and Oracle announcing its intelligent cloud applications at Oracle Open World.

Meanwhile, Oracle has been collecting data startups over the last couple of years, buying AddThis for audience tracking, BlueKai for advertising data and Datalogix for marketing data, while Salesforce’s other primary rival, Microsoft acquired LinkedIn for $26.2 billion in June. Up to this point, Salesforce hasn’t had a data source like this to call its own.

“Salesforce’s competitors are snapping up [data sources] and will integrate them into their platforms to add additional perspective and intelligence,” Brent Leary, co-founder at CRM Essentials told TechCrunch. “If this deal with Twitter happens, it’s to add a constant flow of information into their AI platform, to marry it with their transactional and customer information,” he added. That combination could provide additional data fuel for Einstein.

There’s also plenty of room to use Twitter data across the Salesforce platform and product family, says Dion Hinchcliffe, chief strategy officer at 7Summits, an online enterprise community platform, built on top of Salesforce.

“The enterprise social play for them is that there’s good alignment with Marketing Cloud and Service Cloud on social channels, though it could certainly augment their Community Cloud offering as well,” he said.

As TechCrunch’s Ingrid Lunden pointed out in her article yesterday on the acquisition rumors, “Twitter is not that big in the greater scheme of things compared to Facebook and the aggregate of other platforms where “conversations” are happening.” Still, Hinchcliffe argues, it remains the most powerful platform for large-scale marketing and customer service and this could be what Salesforce is hoping to take advantage of by owning it.

Of course, Salesforce has access to all that Twitter data now, but if a competitor got its hands on the social network, it could make it more difficult (or expensive) to take advantage of. Owning Twitter certainly would give Salesforce the integration upper hand, but Alan Pelz-Sharpe, an analyst with Digital Clarity Group, thinks it’s a risky proposition for Salesforce to take this course.

“Licensing access to the data source is in my opinion a better and much more affordable route to actually buying the company. Twitter has over $2B in revenue and likely would demand a big multiple in any sale. Though a firm like Microsoft could absorb that kind of deal and barely be bruised if it backfired, it would be a massive [financial] risk for Salesforce,” Pelz-Sharpe told me.

While nobody knows what will happen, the deal could make more sense for Salesforce than it appears at first blush. The problem for the cloud CRM giant is that the rumors alone are likely driving up the price to the point that the cost of acquiring Twitter may end up being too rich for its blood. That’s especially true when you look at the deep-pocketed rivals — including Google, Microsoft and Verizon — reportedly lining up for a chance to buy it.

>>> Victoria Gold could be a takeover candidate, analysts say

Victoria Gold could be a takeover candidate, analysts say - report

Victoria Gold Corp. (CVE:VIT), an Ontario-based gold exploration and development company, could attract a takeover bid, according to multiple analysts cited in The Energy Report's Gold Report.

The report discussed an updated definitive feasibility study related to Victoria Gold's Eagle heap leach project which shows positive developments relating to the mine's economics and prompting the analysts to note that this may show "takeover potential" for the company.

The report cited Richard Gray, a Cormark Securities analysts, as saying he believes that the company will see "potential acquirers" paying attention to the company and calling a takeover a "realistic possibility" at the company.

It also cited Adam Melnyk, an analyst at National Bank Financial, as saying it views the company as a "takeout candidate."

>>> Gilead could place takeover bid for Galapagos – report (translated)

Gilead could place takeover bid for Galapagos – report (translated)

24 SEP 2016
California-based biopharmaceutical company Gilead could place a bid for a takeover of Belgian pharmaceutical company Galapagos, the Belgian daily De Tijd reported, citing Seeking Alpha, a blog for investors.

Gilead seems to be ready for takeovers, Seeking Alpha wrote, explaining that investors have asked the company to find a new opportunity to grow. A takeover of Galapagos would be a logical scenario because Gilead is already financing Galapagos's research on filgotinib, used to treat rheumatism, De Tijd said.

KBC analyst Michaël Vlemmix told De Tijd that currently a takeover by Gilead is not possible, because Gilead and Galapagos have signed a standstill agreement. However, it is unknown how long that agreement will last, Vlemmix said.

On Friday, the value of Galapagos shares rose 4.7% to EUR 63.78 per share, the report said, giving Galapagos a stock value of over EUR 3bn.

Galapagos was not available for comment, the report noted.

>>> China's SAIC Motor seeks predators to join £7billion bid for GKN

China's SAIC Motor Corporation seeks predators to join £7billion bid for FTSE 100 engineering giant GKN

Rumours: The GKN takeover gossip that has been lingering since the middle of the summer just refuses to go away
Any partner for SAIC would have to be interested in owning GKN's aerospace division.
Teaming up with a western company could smooth over any potential regulatory or political hurdles surrounding a bid by a state-backed Chinese company.
City sources said SAIC had already approached several US companies, including United Technologies Corporation and Northrop Grumman Corporation, via JP Morgan, about mounting a joint bid.
Potential partners for the Chinese based in Blighty include BAE Systems, down 2.4 per cent, or 13p, to 524.5p, Rolls-Royce, down 1.4 per cent, or 10.5p, to 722.5p, and the highly acquisitive Melrose, up 0.4 per cent, or 0.75p, to 171.75p.
GKN itself ticked up 0.7 per cent, or 2.3p, to 323.2p.

>>> US Close Dow -0.71% S&P -0.57% Nasdaq -0.63% Russell -0.70%

Closing Market Summary: Averages Settle Lower as Apple and Oil Weigh

The stock market ended an upbeat week on a lower note as the major averages pulled back from their recent risk rally. Other factors impacting today's trade included a downturn in crude oil futures and the underperformance of the heavyweight industrial (-0.6%), financial (-0.7%), and technology (-1.0%) sectors. The Dow Jones Industrial Average (-0.7%) finished behind both the S&P 500 (-0.6%) and the Nasdaq Composite (-0.6%). The three indices added between 0.8% and 1.2% for the week.

Equity indices stumbled at the start of the session as investors looked to lock in some profits in the wake of the recent Fed-induced rally. The Federal Reserve spurred risk appetite on Wednesday by voting to leave its key policy rate unchanged. The central bank also lowered the median projection for the fed funds rate for the years ahead. Diminished rate hike expectations eased market concerns over the potential sooner-than-expected removal of policy accommodations.

The broader market extended its loss near midday as the commodity complex came under pressure. Commodities were in focus as participants pored over proposed rule changes designed to limit the physical commodity activities of financial holding companies. Specifically, the Federal Reserve proposed strengthening existing capital requirements and quantitative limits on such companies.

Participants also expressed some misgivings about next week's OPEC meeting. Reports indicated that Saudi Arabia does not expect to make a production decision at this meeting. Separately, Russia indicated that it would not join plans with other oil producers until OPEC agreed on a supply agreement between its own members. The oil collective is scheduled to meet in Algiers, Algeria between September 26 and September 28. WTI crude ended the day lower by 3.9% ($44.53/bbl; -$1.80), but still finished the week up 3.5%.

The benchmark index settled near its session low after failing to reclaim technical support in the area of its 50-day simple moving average (2169). Nine sectors ended in the red with industrials (-0.6%), financials (-0.7%), technology (-1.0%), and energy (-1.3%) rounding out the board. On the flipside, defensively-oriented real estate (+0.3%) and telecom services (+0.4%) finished with the only gains.

The heavily-weighted technology sector (-1.0%) underperformed as large cap components Facebook (FB 127.96, -2.12) and Apple (AAPL 112.71, -1.91) weighed. Facebook was under pressure after reports indicated that the company overstated video ad view times to advertisers. Meanwhile, top-weighted Apple fell 1.6% after GfK stated that launch weekend iPhone sales fell approximately 25.0% year-over-year. Recall that the Dow component rallied 11.4% in the prior week on the heels of some bullish revisions to iPhone sales estimates. Separately, Salesforce.com (CRM 70.39, -4.20) fell 5.6% after reports speculated that the company may attempt to acquire Twitter (TWTR 22.62, +3.99). Alphabet (GOOG 786.90, -0.31) was also mentioned as a potential suitor in the CNBC report. 

In the financial sector (-0.7%), investment brokerages and asset management names underperformed after the Federal Reserve released the proposed changes for holding companies. BlackRock (BLK 365.65, -8.22) and Franklin Resources (BEN 35.19, -0.87) ended lower by 2.2% and 2.4%, respectively. The broader sector gained 0.8% this week, but sports a month-to-date loss of 2.6%. This compares to a loss of 0.3% in the benchmark index. 

Retail names demonstrated relative strength in the consumer discretionary space (-0.2%). Gap (GPS 22.62, +0.04) and L Brands (LB 75.20, +0.92) finished higher by 0.2% and 1.2%, respectively. On the flipside, athletic retailer Finish Line (FINL 22.75, -1.24) weighed as in-line earnings and a reaffirmed full-year outlook failed to impress investors.

Treasuries ended on a mostly higher note with the short end of the curve outperforming. The yield on the 2-yr note finished lower by two basis points (0.76%) while the yield on the 10-yr note finished flat (1.62%).

Today's participation was below the recent average as fewer than 804 million shares changed hands on the NYSE floor.

There was no economic data of note released today. 

Monday's economic data will be limited to the New Home Sales Report for August (consensus 585k), which will be released at 10:00 ET. 

  • Russell 2000: +10.6% YTD
  • Nasdaq: +6.0% YTD
  • S&P 500: +5.9% YTD
  • Dow Jones: +4.8% YTD