Twitter shares jump after co-founder says company must ponder sale

Shares of Twitter jumped on Wednesday after a company co-founder said the social network must ponder options such as a takeover.

Twitter rose 4.5 percent Wednesday after co-founder Ev Williams told Bloomberg TV that the company has to consider all of its options.

The company has been at the center of takeover speculation amid an ongoing struggle with its finances and stock price.

Williams was asked on Bloomberg TV whether Twitter was a takeover target. At first, he didn’t want to discuss the situation, but then went on to elaborate that the company must ponder its options, which would include a merger or acquisition.

“We are in a strong position right now,” Williams said. “As a board member, we have to consider the right options.”

San Francisco-based Twitter could be a good acquisition for the right company, Silicon Valley analysts said.

“All those eyeballs are worth a lot,” said Michael Tchong, founder of Las Vegas-based Ubercool Innovation, which tracks tech trends. “Twitter is a very high-profile leader in the thought community.”

At the end of June, the company  had about 313 million monthly active users worldwide, which was up less than 1 percent from the number the social network reported for the end of March.

“Ideally, they get bought by somebody who needs the audience reach but has the money,” said Rob Enderle, an Oregon-based market researcher who tracks the tech sector. “As a Google property, Twitter would be fine.”

Despite the big audience, the company has yet to figure out a way to convert its users into profits.

“Twitter is massively valuable,” Enderle said. “But the company’s value is in its audience reach, not in its revenue.”

During the 12 months that ended in June, Twitter lost $408.9 million on revenue of $2.48 billion.

“Twitter doesn’t improve their interface enough, they have languished behind Facebook in that regard,” Tchong said. “They would fit well with a company that understands that frequent improvements in the user interface and the site’s features are absolutely essential. They need to figure out who they are and how to monetize that.”

Despite the difficulties, Williams is convinced the social network is in excellent position.

“There is not an asset like Twitter in the world,” Williams said. “All the information that is created on a daily basis, there is so much more that can come out of that.” As a result, Williams added, “I’m an optimist in general” about the company’s prospects.

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Photo: The Twitter building in San Francisco. (Karl Mondon/Bay Area News Group)

 

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