Twitter Reportedly Held Merger Talks With Yahoo
Verizon almost got a new—and quite unexpected—rival in its bid for Yahoo: Twitter.
Yes, executives from the slumping social media network met with Yahoo CEO Marissa Mayer and her team several weeks ago to discuss merger possibilities, the New York Post reports, citing sources close to the talks.
The two teams discussed the financial state of Yahoo (YHOO) and whether a merger would make strategic sense for the two firms.
“Twitter is the destination for instant news, and Yahoo has a lot of eyeballs on its site,” one source told the Post. “The idea isn’t as crazy as you might think.”
It’s not clear that the conversations were serious, though, as Twitter CEO Jack Dorsey—who has his own hurdle to face in addressing his site’s anemic user growth—reportedly did not even attend the meeting. Twitter (TWTR) dropped out of the Yahoo auction soon after the meeting, the Post reports.
When Fortune asked the companies for confirmation of the Post report, Yahoo said it wasn’t commenting on the details of its “strategic review” process. A Twitter spokesperson said, “We don’t comment on rumor and speculation.”
Verizon is widely seen as the leading contender to buy Yahoo’s core asset, which it could combine with AOL, the one-time Internet behemoth that Verizon bought a year ago for $4.4 billion. The telecom giant is looking to build a bigger online advertising business.
AT&T (T) has also reportedly entered the fray, and Berkshire Hathaway’s Warren Buffett is said to be backing a consortium that includes Quicken Loans founder Dan Gilbert. Other potential buyers are said to include private equity firms TPG Capital, KKR, and the pairing of Bain Capital with Vista Equity Partners.
Second round bids are due next week. As recently as April, reports indicated that Yahoo might fetch anywhere between $4 billion and $8 billion. But after investors were allowed access to nonpublic information and were subject to weeks of sales presentations, the Wall Street Journal reported that bids would come in much lower—between $2 and $3 billion—citing “people familiar with the matter.”
This story has been updated to reflect Yahoo’s and Twitter’s responses to the Post report.