The following is excerpted from Kurt Wagner’s “Battle for the Bird: Jack Dorsey, Elon Musk and the $44 Billion Fight for Twitter’s Soul.”
Like most billionaires, Marc Benioff didn’t lose fairly often. By the summer season of 2016, the Salesforce CEO was operating one of the vital profitable tech corporations on the earth, which he based in 1999 and had since grown right into a $50 billion behemoth. Salesforce’s success had made Benioff extremely wealthy, and he knew learn how to benefit from the perks of a $4 billion fortune. He owned a five-acre estate on the Big Island in Hawaii and a number of houses in San Francisco’s ritzy Sea Cliff neighborhood, which was throughout city from the native kids’s hospital that bore his identify due to a $100 million donation. In 2014, Fortune readers chosen Benioff because the journal’s “Businessperson of the Year.” Benioff lived an excellent life.
But that summer season, Benioff was livid. Just a few weeks earlier, he had been spurned when he tried to purchase LinkedIn, the skilled social community that as an alternative bought to rival Microsoft for an eye-popping $26 billion in money. Benioff had made the choice troublesome no less than, bidding up the price repeatedly earlier than finally shedding out regardless of a ultimate supply that was truly a couple of bucks per share greater than Microsoft’s bid. The rejection left Benioff determined for one more deal, and that summer season he texted Jack Dorsey, whose personal Sea Cliff mansion was seen from one among Benioff’s home windows, and inquired about shopping for Twitter as an alternative.
To lots of people, together with lots of Benioff’s high lieutenants, a Twitter-Salesforce marriage didn’t make a lot sense. Salesforce was an enterprise software program firm, which means it didn’t build merchandise for every-day web customers like Twitter or Facebook, however as an alternative made a killing promoting software program that different businesses used to handle their gross sales and buyer relationships. It was a profitable business, however not essentially an apparent match for a social community the place individuals posted about politics and trolled celebrities. To Benioff, although, a Twitter-Salesforce marriage was all that made sense. He began calling Twitter an “unpolished jewel” and thought Twitter was an ideal manner for Salesforce’s purchasers to get suggestions from their prospects. Twitter was sitting on a “treasure trove of data” that businesses may use to enhance all the things from their advertising and marketing technique to product growth, he thought. “Plus, Twitter was struggling,” he would later write in his memoir, “and the way I saw it, the merging of our two companies would be beneficial for us both.”
Benioff had approached Twitter first, however surprisingly, he wasn’t the one suitor. Shortly after Benioff texted Dorsey, Disney additionally approached Twitter a few deal. Disney executives had watched in earnest over the summer season as Twitter tried to reposition itself as a stay video service and thought that the corporate is likely to be the answer to one among its latest issues. Netflix and Hulu have been proving that streaming video on to viewers was the longer term, and whereas Disney owned a few of the most beneficial video content material on the earth, it had largely relied on companions to ship it into individuals’s houses. Buying Twitter would minimize out the middle-man, giving Disney the expertise to stream its catalog of films, TV exhibits, and stay sports activities on to its viewers. Disney CEO Bob Iger had thought of building his personal streaming platform, however his chief technique officer, Kevin Mayer, estimated that it may take 5 years. Buying an organization like Twitter, whereas costlier, would expedite that timeline considerably. Plus, the Disney executives had an in: Dorsey sat on Disney’s board of administrators and regarded Iger a mentor.
Dorsey and the remainder of Twitter’s board weren’t on the lookout for a purchaser when Salesforce and Disney first approached, however the thought of lastly promoting the corporate wasn’t a foul one given the way in which issues had been going. A sale would relieve the fixed strain from Twitter’s slumping inventory value, and may assist the corporate keep away from a significant spherical of job cuts, which nobody was enthusiastic about.
Both suitors floated unofficial bids: Salesforce was contemplating a value round $29 per share, which valued Twitter simply north of $20 billion; Disney got here in a couple of {dollars} decrease, someplace within the mid to excessive 20s, nearer to $17 or $18 billion. Twitter’s market cap earlier that summer season had fluctuated between $12 billion and $14 billion, which made each choices appear interesting. Twitter and its board employed bankers from Goldman Sachs and Allen & Company to advise them on what to do. As fiduciaries, the board had a accountability to Twitter’s shareholders to search for the very best deal, so that they determined to run a proper “process” and see if anybody else was all in favour of shopping for the corporate.
They acquired a whole lot of nibbles. Twitter’s govt staff, together with Dorsey, CFO Anthony Noto, COO Adam Bain, and basic counsel Vijaya Gadde, met with a laundry listing of outstanding tech executives over a number of weeks. There was Jeff Blackburn from Amazon, who didn’t appear that , and Eddy Cue and Adrian Perica from Apple, who appeared very however couldn’t determine how Twitter match into Apple’s broader technique. Twitter chairman Omid Kordestani spoke with YouTube boss Susan Wojcicki and different Google execs, old mates and colleagues who have been additionally however fearful about antitrust points. Brian Roberts at Comcast and Steve Burke from NBCUniversal took conferences however have been by no means critical patrons. Microsoft CEO Satya Nadella and his high dealmaker Peggy Johnson additionally met with Twitter however had simply purchased LinkedIn for $26 billion; Twitter, maybe, was a couple of months late.
It turned clear after weeks of conferences that Salesforce and Disney have been the one two critical contenders. What wasn’t clear was whether or not Dorsey truly needed to promote. The Twitter CEO was a comparatively small shareholder—he managed simply over 3% of Twitter’s voting energy, which meant he couldn’t decide on his personal even when he needed to. But as a cofounder and the not too long ago appointed CEO, his voice carried extra weight than anyone’s, and it was obvious to these round him that Dorsey wasn’t excited in regards to the Salesforce bid. Benioff’s imaginative and prescient for Twitter as a knowledge gold mine to gasoline higher customer support felt like a tragic actuality for a product that had as soon as helped orchestrate uprisings within the Middle East and reshaped the worldwide media business. Dorsey wasn’t bought on the concept, and his indifference was shared by a number of different senior members of Twitter’s staff and board.
Almost everybody, although, preferred the concept of a Twitter-Disney deal, together with Dorsey. He’d joined Disney’s board in 2013 and was an enormous fan of Iger. If Twitter may stay inside Disney, it will possible imply Dorsey may keep on the helm however with out the added strain of operating a public firm. The thought of Twitter becoming a member of the likes of Pixar, ESPN, and Lucasfilm beneath the broader Disney umbrella sounded actually interesting.
Then, after months of secret conferences and dinners and brainstorming, all the things abruptly unraveled. The identical week that Twitter’s bankers have been anticipating formal bids, each Disney and Salesforce balked. Benioff had spent weeks getting blowback from Salesforce’s traders and his personal administration staff, who all thought shopping for Twitter was an enormous mistake. After information of a potential deal leaked, Salesforce’s inventory fell 8% over a two-week span. Benioff couldn’t justify the deal and, regardless of his preliminary outreach, selected to save lots of his money and walk away.
Iger acquired nearer, and even had approval from Disney’s board of administrators to finalize a deal. After spending a ultimate weekend considering it over, although, he had a change of coronary heart. “The troubles were greater than I wanted to take on, greater than I thought it was responsible for us to take on,” he’d later say. More particularly, Iger began to worry in regards to the prevalence of hate speech on Twitter—the racists and the trolls and the spam that had earned Twitter a popularity as being one of many web’s most generally used cesspools. Disney had spent many years cultivating a family-friendly model; it was the home of Mickey and Minnie and Pluto. Twitter would put all that in jeopardy. “The nastiness,” Iger confessed, “is extraordinary.” Iger picked up the telephone and referred to as Dorsey with the information. Twitter’s CEO was shocked. After months of conferences and negotiations, each Disney and Salesforce have been out.
Just a few weeks later, Noto flew again to Los Angeles for a last-ditch effort to carry Disney again to the desk. It almost labored. The two sides mentioned a second, lowball bid round $21 per share, or a complete value of about $15 billion. Disney, it appeared, was to see simply how determined Twitter was, and the quantity was so low that some on Twitter’s board didn’t even take the discussions significantly. During a board assembly to speak about it, Kordestani requested everybody within the room to weigh in with their opinion. Given how intimately concerned he’d been within the course of, Noto was within the room and shared his emotions. “Tell them to fuck off,” he mentioned. The deal talks have been formally over. Twitter was by itself.
After months of distractions and now with out a purchaser, Twitter’s administration staff pivoted. It was time to chop prices. Twitter had by no means been worthwhile in its ten-year existence, and turning a revenue all of the sudden turned a high precedence to win again traders and hopefully jump-start the inventory value. On October 27, for the second 12 months in a row, Twitter laid off roughly 350 staff, or 9 % of the employees, and closed a number of worldwide workplaces.
In a call that might be second-guessed for years to come back, Twitter additionally shut down Vine, its video app that had popularized the idea of brief, bite-sized movies. Dorsey had found Vine years earlier when he was nonetheless Twitter’s chairman and pushed laborious for the corporate to amass it. The app was a cultural phenomenon, turning a whole bunch of unknown web creators into stars with huge followings and profitable model offers. But Twitter by no means prioritized Vine’s business. The service by no means made significant money for the corporate, and the Vine staff by no means constructed options in order that well-liked customers may receives a commission for his or her movies. Vine’s web stars quickly left for YouTube and Instagram, the place it was simpler to make money. By the time Vine was shuttered, most of its homegrown creators have been already gone, and Twitter was left questioning, What if? Just a few years later, one other app referred to as TikTook would develop into one of the vital well-liked social media apps on the earth by specializing in related short-form movies.
The temper inside Twitter was as darkish and miserable because it had ever been. Bain, the COO, had spent the previous three months imagining a world the place Twitter was half of a bigger firm, shielded by the pressures of Wall Street. When the offers fell aside and Twitter needed to minimize extra jobs, he was deflated. After greater than six years on the firm, Bain left Twitter only a few weeks after the layoffs.
It had been almost a 12 months since Noto had dropped an f-bomb at Tea Time, telling Twitter’s staff that there was nobody coming to save lots of the corporate. At the time, that assertion was principally motivational, but it surely had additionally been prophetic. Twitter was certainly by itself. If it was going to show issues round, it will have to take action as an impartial firm with Jack Dorsey because the CEO.
Excerpted from BATTLE FOR THE BIRD: Jack Dorsey, Elon Musk, and the $44 Billion Fight for Twitter’s Soul (Atria Books; On Sale: February 20, 2024; Hardcover; ISBN 9781668017357). Copyright © 2024 by Kurt Wagner. Reprinted by permission of Atria Books, an imprint of Simon & Schuster, LLC
