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 very often. By the summer of 2016, the Salesforce CEO was running one of the most successful tech companies in the world, which he founded in 1999 and had since grown into a $50 billion behemoth. Salesforce’s success had made Benioff incredibly rich, and he knew how to enjoy the perks of a $4 billion fortune. He owned a five-acre estate on the Big Island in Hawaii and multiple homes in San Francisco’s ritzy Sea Cliff neighborhood, which was across town from the local children’s hospital that bore his name thanks to a $100 million donation. In 2014, Coins2Day readers selected Benioff as the magazine’s “Businessperson of the Year.” Benioff lived a good life.
But that summer, Benioff was furious. A few weeks earlier, he had been spurned when he tried to buy LinkedIn, the professional social network that instead sold to rival Microsoft for an eye-popping $26 billion in cash. Benioff had made the decision difficult at least, bidding up the price repeatedly before eventually losing out despite a final offer that was actually a few bucks per share higher than Microsoft’s bid. The rejection left Benioff desperate for another deal, and that summer he texted Jack Dorsey, whose own Sea Cliff mansion was visible from one of Benioff’s windows, and inquired about buying Twitter instead.
To a lot of people, including many of Benioff’s top lieutenants, a Twitter-Salesforce marriage didn’t make much sense. Salesforce was an enterprise software company, meaning it didn’t build products for every-day internet users like Twitter or Facebook, but instead made a killing selling software that other businesses used to manage their sales and customer relationships. It was a lucrative business, but not necessarily an obvious fit for a social network where people posted about politics and trolled celebrities. To Benioff, though, a Twitter-Salesforce marriage was all that made sense. He started calling Twitter an “unpolished jewel” and thought Twitter was a perfect way for Salesforce’s clients to get feedback from their customers. Twitter was sitting on a “treasure trove of data” that businesses could use to improve everything from their marketing strategy to product development, 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, but surprisingly, he wasn’t the only suitor. Shortly after Benioff texted Dorsey, Disney also approached Twitter about a deal. Disney executives had watched in earnest over the summer as Twitter tried to reposition itself as a live video service and thought that the company might be the solution to one of its newest problems. Netflix and Hulu were proving that streaming video directly to viewers was the future, and while Disney owned some of the most valuable video content in the world, it had largely relied on partners to deliver it into people’s homes. Buying Twitter would cut out the middle-man, giving Disney the technology to stream its catalog of movies, TV shows, and live sports directly to its audience. Disney CEO Bob Iger had considered building his own streaming platform, but his chief strategy officer, Kevin Mayer, estimated that it could take five years. Buying a company like Twitter, while more expensive, would expedite that timeline significantly. Plus, the Disney executives had an in: Dorsey sat on Disney’s board of directors and considered Iger a mentor.
Dorsey and the rest of Twitter’s board weren’t looking for a buyer when Salesforce and Disney first approached, but the idea of finally selling the company wasn’t a bad one given the way things had been going. A sale would relieve the constant pressure from Twitter’s slumping stock price, and might help the company avoid a major round of job cuts, which no one was excited about.
Both suitors floated unofficial bids: Salesforce was considering a price around $29 per share, which valued Twitter just north of $20 billion; Disney came in a few dollars lower, somewhere in the mid to high 20s, closer to $17 or $18 billion. Twitter’s market cap earlier that summer had fluctuated between $12 billion and $14 billion, which made both options seem appealing. Twitter and its board hired bankers from Goldman Sachs and Allen & Company to advise them on what to do. As fiduciaries, the board had a responsibility to Twitter’s shareholders to look for the best possible deal, so they decided to run a formal “process” and see if anyone else was interested in buying the company.
They got a lot of nibbles. Twitter’s executive team, including Dorsey, CFO Anthony Noto, COO Adam Bain, and general counsel Vijaya Gadde, met with a laundry list of prominent tech executives over several weeks. There was Jeff Blackburn from Amazon, who didn’t seem that interested, and Eddy Cue and Adrian Perica from Apple, who seemed very interested but couldn’t figure out how Twitter fit into Apple’s broader strategy. Twitter chairman Omid Kordestani spoke with YouTube boss Susan Wojcicki and other Google execs, old friends and colleagues who were also interested but worried about antitrust issues. Brian Roberts at Comcast and Steve Burke from NBCUniversal took meetings but were never serious buyers. Microsoft CEO Satya Nadella and his top dealmaker Peggy Johnson also met with Twitter but had just bought LinkedIn for $26 billion; Twitter, perhaps, was a few months late.
It became clear after weeks of meetings that Salesforce and Disney were the only two serious contenders. What wasn’t clear was whether Dorsey actually wanted to sell. The Twitter CEO was a relatively small shareholder—he controlled just over 3% of Twitter’s voting power, which meant he couldn’t make a decision on his own even if he wanted to. But as a cofounder and the recently appointed CEO, his voice carried more weight than anybody’s, and it was apparent to those around him that Dorsey wasn’t excited about the Salesforce bid. Benioff’s vision for Twitter as a data gold mine to fuel better customer service felt like a sad reality for a product that had once helped orchestrate uprisings in the Middle East and reshaped the global media industry. Dorsey wasn’t sold on the idea, and his indifference was shared by several other senior members of Twitter’s team and board.
Almost everyone, though, liked the idea of a Twitter-Disney deal, including Dorsey. He’d joined Disney’s board in 2013 and was a huge fan of Iger. If Twitter could live inside Disney, it would likely mean Dorsey could stay at the helm but without the added pressure of running a public company. The idea of Twitter joining the likes of Pixar, ESPN, and Lucasfilm under the broader Disney umbrella sounded really appealing.
Then, after months of secret meetings and dinners and brainstorming, everything abruptly unraveled. The same week that Twitter’s bankers were expecting formal bids, both Disney and Salesforce balked. Benioff had spent weeks getting blowback from Salesforce’s investors and his own management team, who all thought buying Twitter was a massive mistake. After news of a possible deal leaked, Salesforce’s stock fell 8% over a two-week span. Benioff couldn’t justify the deal and, despite his initial outreach, chose to save his money and walk away.
Iger got closer, and even had approval from Disney’s board of directors to finalize a deal. After spending a final weekend thinking it over, though, he had a change of 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 specifically, Iger started to fret about the prevalence of hate speech on Twitter—the racists and the trolls and the spam that had earned Twitter a reputation as being one of the internet’s most widely used cesspools. Disney had spent decades cultivating a family-friendly brand; 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 phone and called Dorsey with the news. Twitter’s CEO was stunned. After months of meetings and negotiations, both Disney and Salesforce were out.
A few weeks later, Noto flew back to Los Angeles for a last-ditch effort to bring Disney back to the table. It almost worked. The two sides discussed a second, lowball bid around $21 per share, or a total price of about $15 billion. Disney, it seemed, was interested to see just how desperate Twitter was, and the number was so low that some on Twitter’s board didn’t even take the discussions seriously. During a board meeting to talk about it, Kordestani asked everyone in the room to weigh in with their opinion. Given how intimately involved he’d been in the process, Noto was in the room and shared his feelings. “Tell them to fuck off,” he said. The deal talks were officially over. Twitter was on its own.
After months of distractions and now without a buyer, Twitter’s management team pivoted. It was time to cut costs. Twitter had never been profitable in its ten-year existence, and turning a profit suddenly became a top priority to win back investors and hopefully jump-start the stock price. On October 27, for the second year in a row, Twitter laid off roughly 350 employees, or 9 percent of the staff, and closed several international offices.
In a decision that would be second-guessed for years to come, Twitter also shut down Vine, its video app that had popularized the concept of short, bite-sized videos. Dorsey had discovered Vine years earlier when he was still Twitter’s chairman and pushed hard for the company to acquire it. The app was a cultural phenomenon, turning hundreds of unknown internet creators into stars with massive followings and lucrative brand deals. But Twitter never prioritized Vine’s business. The service never made meaningful money for the company, and the Vine team never built features so that popular users could get paid for their videos. Vine’s internet stars soon left for YouTube and Instagram, where it was easier to make money. By the time Vine was shuttered, most of its homegrown creators were already gone, and Twitter was left wondering, What if? A few years later, another app called TikTok would become one of the most popular social media apps in the world by focusing on similar short-form videos.
The mood inside Twitter was as dark and depressing as it had ever been. Bain, the COO, had spent the past three months imagining a world where Twitter was part of a larger company, shielded by the pressures of Wall Street. When the deals fell apart and Twitter had to cut more jobs, he was deflated. After more than six years at the company, Bain left Twitter just a few weeks after the layoffs.
It had been almost a year since Noto had dropped an f-bomb at Tea Time, telling Twitter’s employees that there was no one coming to save the company. At the time, that statement was mostly motivational, but it had also been prophetic. Twitter was indeed on its own. If it was going to turn things around, it would have to do so as an independent company with Jack Dorsey as 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
