Salesforce Buying Twitter Would Make Perfect Sense
If you’re wondering why on Earth Salesforce might want to buy Twitter, Vala Afshar, the enterprise company’s “chief digital evangelist,” has a few reasons.
1 personal learning network
2 the best realtime, context rich news
3 democratize intelligence
4 great place to promote others
— Vala Afshar (@ValaAfshar) September 23, 2016
Afshar quickly added that he was tweeting a personal opinion and not confirming today’s rumors that Salesforce is interested in acquiring the struggling social media platform. As for his employer, it most definitely had nothing to say.
But he’s right. Salesforce started out selling “customer relationship management” software–tools that lets sales departments organize notes about customers and prospective customers. It is so much more than that now, and wants to be an artificial intelligence company on par with Facebook and Google.
Twitter could help with that.
Twitter has long resisted surrendering its independence, but selling out makes sense. About 313 million people use the service each month, which sounds like a lot until you realize Instagram (owned by Facebook) and Snapchat are as big or bigger, and Facebook dwarfs them all with 1.65 billion monthly users. Twitter’s earnings rose last quarter, but remain well behind those of Facebook. Instagram claims to have doubled ad sales in the past six months.
Simply put, Twitter lags behind in sales and growth. That’s never a good place to be, especially in Silicon Valley. But all of the things that ought to motivate Twitter to sell make others wary of buying. Twitter has a market cap of $16 billion, which is a lot to pay for a company that’s struggling to attract users and sales.
Google is the most obvious savior. It has tried and tried and tried to figure out social media, to little avail. (Google Buzz, anyone? How about Orkut? Google+?) Twitter might not be Facebook, but it does have a large and devoted user base. Google could use its vast advertising operation to wring profits out of Twitter, and use Android—the world’s most popular smartphone operating system—to promote Twitter’s mobile app. But the European Union’s antitrust case over Android and a similar investigation in the US could make it hard to capitalize on Twitter.
As for Salesforce, well, it already tried to buy LinkedIn (Microsoft got it), so it clearly wants a social network. It offers customer service software, market research tools, email marketing systems, and other products. Many of them already use social media. If you’ve ever tweeted a complaint about a company and received a response post-haste, you’ve seen how social networks play into Salesforce’s plans. Bringing Twitter in-house would facilitate building tools that connect sales, marketing and customer service clients directly to Twitter, providing deeper integration with its products.
But Salesforce wants to do more than help customers monitor social media for @mentions. Earlier this year it acquired MetaMind, a company that specializes in deep learning–the branch of AI that Google, Facebook and Microsoft are dumping boatloads of money into. Salesforce hopes its “Einstein” project brings AI to all of its products. The idea is that AI could help sales departments identify which leads are most likely to buy, help marketers determine which products will sell, and help customers build AI-driven applications. Doing this will require enormous amounts of data. Twitter isn’t the biggest player in this game, but it still produces staggering quantities of data. That can only help Salesforce.
None of this may be enough to justify the expense of buying a company that has all but stalled. But the entire tech sector is diving headlong into AI. Google and Facebook may not compete directly with Salesforce today, but they may tomorrow. Buying Twitter is a hedge against that.