Sources told CNBC that the ailing social media company had fielded expressions of interest from several companies, which include Google and Salesforce.com. While any potential deal is far from imminent, the revelation had some scratching their heads on why enterprise tech company Salesforce would be interested in Twitter.
On the surface, Salesforce would seem like a highly unlikely buyer. After all, CEO Marc Benioff's company generates more than $8 billion a year selling cloud software and services to other businesses, while Twitter's $2.4 billion in annual revenue comes from advertisers targeting consumers.
Not to mention Salesforce's $48.2 billion market capitalization is just above the reportedly $30 billion Twitter could ask for, according to Recode.
"I don't know why anybody would pay a big premium for it because I think the revenue numbers may be challenged going forward and I don't see a big growth story there going forward," Michael Cuggino, president and portfolio manager at Permanent Portfolio Funds, told CNBC's "Power Lunch" on Friday.
Plus, inheriting a large, money-losing consumer-focused advertising business with about 4,000 employees would create all sorts of cultural and business challenges for Salesforce. Twitter's recent plunges into media, like live streams, don't really fit into Saleforce's current strategy, said Crawford Del Prete, chief research officer at IDC, who compared the rumor to similar reports about Saleforce's interest in LinkedIn.
"When you look at a LinkedIn asset in the context of Salesforce it makes a lot more logical sense," Del Prete said. "When you join LinkedIn you're giving contact information, that's all incredibly valuable in business-to-business sales. The logic of Salesforce wanting that in their cloud offering makes perfect sense. Outside of the verification process [on Twitter], you really don't even know who these people are."
Twitter has other offerings, like real-time sentiment analysis and analytics on brands, but Del Prete said an acquisition would be a very expensive way to get that data, compared to a licensing deal. Plus, he said, Twitter's future in media might be limited if its role as an instant read of events is rolled into Saleforce's social network-like tool, Chatter.
But there are a few reasons to take Salesforce seriously. For one, we know the company was highly interested in buying LinkedIn, which would have cost significantly more than Twitter. After Microsoft ultimately won the bid, Benioff acknowledged that it was a good time to pursue LinkedIn because the stock sank in the first half of the year. Twitter, even after Friday's jump, is down more than 15 percent over the past year.
"The fact that they went after LinkedIn opens a Pandora's box to the fact that they're interested in internet assets," said Neil Doshi, an analyst at Mizuho Securities, who has a neutral rating and $15 price target on Twitter. "This seems one degree further from the LinkedIn business, which has a real enterprise solution."
Chatter, a social platform offered by Salesforce, is already essentially a combination of Facebook and Twitter, said Jeremy Roche, president and CEO of FinancialForce.