Could a Yahoo! purchase be just what Twitter needs?
Twitter Inc.’s stock has dwindled over the last year amidst staff shakeups, falling employee confidence and rumors of CEO Dick Costolo’s departure, but the microblog company saw a sudden spike in share prices yesterday over speculation that it should purchase search engine-relic Yahoo! Inc.
Ross Levinsohn, former interim CEO at Yahoo, told CNBC that purchasing Yahoo could be a huge boon for Twitter.
“I view [Twitter] as one of the great media companies of our generation,” Levinsohn said. “It is the world’s biggest newsroom. If you put Twitter and Yahoo together, it would be the most powerful force in the media business.”
According to Levinsohn, the combination between the two companies would bring together Yahoo’s “massive media business” and support structures with Twitter’s real-time media and social network platform. Yahoo is looking to bring in more real-time media, said Levinsohn, and Twitter is looking to diversify, making a partnership between the two a perfect match.
“You put those two together, and it’s an incredible force in mobile, in video, in products – it’d be a super exciting company to watch.”
Could it work?
When asked if he had talked about combining with Twitter during his time at Yahoo, Levinsohn said that “we didn’t talk about buying it,” but he had spoken with both Twitter’s CEO and president about how they could integrate the strengths of the two companies.
Levinsohn spoke highly of Twitter’s CEO, Dick Costolo, saying that Costolo “steadied a rocky ship when he came in.” He also praised Twitter’s president, Adam Bain, saying that Bain is “an amazing executive and would certainly be in line should Dick ever leave that company.”
SunTrust analyst Robert Peck wrote out 10 reasons that Levinsohn’s suggestion of a Twitter/Yahoo merger made sense, citing synergy between the two companies’ audiences, media offerings and mobile capabilities, as well as allowing the two companies to save on research and development costs by sharing knowledge. Peck also noted a strong partnership between Twitter’s short form social media and Vine content with Yahoo’s longer form Tumblr and video offerings.
Levinsohn’s speculations, combined with other speculation that Carl Icahn may purchase a 9.9 percent share of Twitter in 2015, caused a 7 percent spike in Twitter’s share price yesterday.
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