The deal seems slightly unlikely because of search engine business’s increasing focus on cloud storage and artificial intelligence development rather than social networking
In earlier news, Twitter Inc. (NYSE:TWTR) has been in the eyes of buyers for the past few weeks. Amongst the most renowned companies to potentially bid for the micro-blogger are Alphabet Inc. (NASDAQ:GOOGL), Verizon Communications Inc. (NYSE:VZ), Microsoft Corporations (NASDAQ:MSFT), and salesforce.com, inc. (NYSE:CRM). It has also witnessed rising interest from Walt Disney Co. (NYSE:DIS). In this regard, according to people familiar with the matter, Google has been reported recently to be working with a financial advisor known as Lazard Ltd. (NYSE:LAZ). It is doing so for considering a potential bid for the Californian business amid Twitter’s continued efforts of exploring its sales options.
Moreover, the report indicated that while hiring Lazard, the Mountain View-based company has not stated if it would definitely make an offer. However, the move suggests its plans of making a bid and the fact that the company is evaluating the said option. If it does so, it would put it against other above mentioned potential bidders. Nonetheless, its spokeswoman Gina Scigliano refused to comment on the situation. Also, Lazard spokeswoman could not be reached for noting its viewpoints. Despite this, Lazard continues to remain one of its most essential financial advisors. This is because it had served the same role previously when the $539.39 billion enterprise decided to acquire Apigee Corp. (NASDAQ:APIC) for $625 million and was able to extract a deal, expected to close at the end of FY16.
In addition to this, Google, which is considered as the largest and the strongest subsidiary of its parent business, was viewed as the most natural suitor for Twitter. The latter business has been struggling for some time now; however, both are similar to each other in terms of mobile publishing products and advertising. The two have invested heavily in the above mentioned segments. Also, the search engine business also cut a deal with the social networking site to include its content in the search results despite their failure to achieve collaboration earlier. Also, Google has been searching for opportunities to expand its footsteps into the social media segment. This was because its previous effort known as Google Plus, flopped largely in the market, leaving it with no service that could compete with other rivals such as Facebook Inc. (NASDAQ:FB).
Due to such increasing interest from the tech giant as well as the San Francisco-based organization, the micro blogger has joined hands with Allen & Co. and Goldman Sachs to aid with its sales process. While Google may have hinted some interest, the deal seems unlikely because of the slow growth of Twitter’s user base. Although it has been trying to reshape its business to include live streaming content, it has failed to attract immediate buying bids. Also, the deal also seems unlikely because of Google’s increasing focus on cloud storage and artificial intelligence rather than social networking. Regardless of this, the investors of the Californian business continue to be bullish.
Alphabet has also scored 38 Buy, three Overweight, and four Hold ratings from FactSet Fundamentals. It has an average price target amounting to $936.37, exhibiting its potential to increase by 16.46% over the last close.