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What Yahoo’s Fate Says About Twitter’s Future

People are seen as silhouettes as they check mobile devices whilst standing against an illuminated wall bearing Twitter Inc.'s logo.People are seen as silhouettes as they check mobile devices whilst standing against an illuminated wall bearing Twitter Inc.'s logo.
People are seen as silhouettes as they check mobile devices whilst standing against an illuminated wall bearing Twitter Inc.'s logo.Photograph by Chris Ratcliffe — Bloomberg via Getty Images

This morning Verizon (VZ), the proud new owner of Yahoo Answers, among other assets, reports its second-quarter financials. Verizon’s acquisition of Yahoo has been expected for months, and we’re not done yet! (Because of Yahoo’s complicated deal structure, this thing will take six to nine months to close.)

Meanwhile, Twitter (TWTR) will announce its earnings this evening. It has been a year since Dick Costolo resigned as CEO and co-founder Jack Dorsey returned. But Twitter still struggles to answer the question that’s plagued its entire existence: “What is Twitter?” Dorsey’s most recent answer, “Twitter is ‘live’ ” hasn’t really stuck. Yesterday, Twitter unveiled a new ad campaign playing up its role as a political news engine with the message, “See what’s happening.” It emphasizes Twitter’s biggest selling point: No matter how aggressively Facebook (FB), YouTube, Instagram, and Snapchat try to compete, Twitter is still the go-to place for politicians, business leaders, athletes, and Kanye West to make important announcements.

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During its call tonight, I’ll be listening for questions about Twitter’s recent push into sports—the last bastion of live television viewing. Its recent spate of livestreaming deals with MLB, NHL, NBA, and NFL has prompted speculation that Twitter might be a takeover target for the likes of ESPN. At Fortune’s Brainstorm Tech conference in Aspen earlier this month, Disney CEO Bob Iger was candid in his assessment that ESPN will eventually need to move away from traditional cable packages.

Twitter’s $13 billion market cap makes such a deal feel too expensive. But maybe all ESPN has to do is wait.

In 2007, Yahoo rejected a $44 billion takeover offer. Less than a decade later, Verizon got it for one-tenth that price, a relatively modest $4.8 billion. If Yahoo’s fate tells us anything, it’s that turning around a struggling Internet asset is nearly as impossible as knowing the right time to sell.

Update: This article has been updated to reflect the fact that Twitter will not longer broadcast its earnings calls on Periscope. The company announced the news via tweet:”Starting with Tue’s earnings, we’ll move back to an audio-only call. Investor feedback was that audio stream + Q&A most important. decided to stop using Periscope.”