UPDATE: Disney Drops Twitter Pursuit After Image Concerns
According to Bloomberg:
Walt Disney Co. decided not to pursue a bid for Twitter Inc. partly out of concern that bullying and other uncivil forms of communication on the social media site might soil the company’s wholesome family image, according to people familiar with management’s thinking.
The producer of family fare like “Finding Dory” had gone so far as to hire two investment banks, JPMorgan Chase & Co. and Guggenheim Partners LLC, to help evaluate a bid for Twitter. Disney management also listened to a presentation about the business from Twitter executives, according to the people, who asked not to be identified because the discussions were private.
There were other reasons for Disney not to pursue Twitter. The social media pioneer, creator of the 140-character tweet, is losing money and yet sports a market value of almost $12 billion. That would be a big deal even for Disney, which has a market value 12 times that. Some of Disney’s largest investors called the company over the past few weeks to express their displeasure with a Twitter purchase for those reasons, people close to the companies said.
Salesforce.com Inc. also decided against a Twitter bid, as did Alphabet Inc.’s Google.
Twitter could have been another milestone in the career of Disney Chief Executive Officer Bob Iger. The 65-year-old can point to the success of other acquisitions made under his tenure such as Pixar, Marvel and Lucasfilm. In a public chat at Boston College earlier this month Iger talked about how critical it is for Disney’s brands to establish a direct connection to consumers via mobile devices.
Iger recruited Twitter co-founder and CEO Jack Dorsey to the Disney board three years ago. Dorsey has said he respects Iger and considers him a mentor. Iger was invited to speak to Twitter’s senior staff about leadership at the beginning of the year.
Dorsey has been resistant to selling the company, however, hoping instead for more time to prove that a new live-video streaming strategy can help increase user growth, people familiar with the matter have said. Twitter’s board decided to retain bankers to explore the option after receiving interest from a prospective bidder that has since backed out.
Twitter has for years faced criticism for its hands-off approach to abuse and harassment on its service. Because people don’t have to use their real names, racist, sexist and anti-Semitic internet “trolls” have thrived on the platform. The company has pledged to become more serious about the issue in the last year, working on solutions such as letting people block keywords. Still, attacks this year have led to temporary departures of high-profile users including Leslie Jones, an actress in the movie “Ghostbusters,” as well as a New York Times journalist.
Twitter has only recently started exploring technological solutions to harassment on its service. Disney’s discomfort with abuse on the site indicates that it’s a larger problem for Twitter’s business prospects than its executives imagined.
Twitter shares rose less than 1 percent to $16.87 in early trading Tuesday.
