Twitter's fate: Salesforce's Marc Benioff addresses acquisition talk

Marc Benioff, the founder and chief executive of Salesforce.com, showed up onstage on Wednesday afternoon at his biggest customer event of the year to talk up his business technology company's products and strategy.

But what was arguably the higher-stakes meeting was held later that day. At the plush St. Regis San Francisco Hotel, Benioff presided over a gathering with Wall Street analysts and investors. His aim: to assuage their concerns about his plan to buy Twitter, the struggling social media company.

"We look at a lot of things," Benioff told the room, without directly mentioning Twitter. "The number we acquire is very few." Still, he said, "it gives us ideas" to look at companies.

For weeks, the technology world has been buzzing about Benioff's intentions, after it emerged last month that Salesforce was interested in bidding for Twitter.

Yet Twitter would fit into a vision that Benioff has had for Salesforce, which he founded in 1999, as a company that can help enterprises with all of their customer needs. Twitter, in Benioff's eyes, is already a powerful customer service tool that airlines, restaurants, banks and many other companies use to field consumer complaints and requests. Companies can also use what people post on Twitter to glean consumer habits.

"This is a huge messaging and communications service," Benioff, who turned 52 last month, said on Wednesday in an interview on his way to the St. Regis. He added, "I use mergers and acquisition activity to think about the market."

Benioff faces a battery of challenges in buying Twitter. Sceptical investors have pushed Salesforce stock down about 5 per cent since news broke that the company was considering bidding for the social media company. Behind the scenes, investors have been grousing about a potential purchase. Any deal would very likely be Salesforce's largest, with Twitter valued at about $14 billion. Salesforce, which is unprofitable, has a market capitalisation of about $48 billion.

Twitter investors appear dubious, too. The company's stock dropped more than 20 per cent on Thursday as speculation about other suitors seemed to dissipate.

"This would be a disaster," said Joel Fishbein, managing director at BTIG, a financial services firm. "Benioff is a visionary, but this could blow up. Engineers could leave Salesforce, and it would send the stock down 30 or 40 per cent."

Benioff acknowledged that Salesforce would face difficulties in taking over Twitter, given that Salesforce sells software to businesses while Twitter is a consumer technology company. The chief executive, who is an activist in areas like gay rights and gender equality, also said he was troubled by the amount of hate speech on Twitter.

But it is not unusual for Benioff to go against the grain. A San Francisco native, he worked at Oracle, the business software company, for years before founding Salesforce as an online software firm in 1999, when online software was still unproven.

Salesforce soon became the largest maker of so-called customer relationship management, or C.R.M., software sold over the cloud, which is used by salespeople and marketers at companies like American Express and General Electric. Salesforce went public in 2004.

Along the way, Salesforce became one of the largest employers in San Francisco and Benioff became one of the city's richest men. He has turned part of his fortune toward philanthropy, donating millions of dollars to a new children's hospital in San Francisco that bears his family's name, as well as pledging money to the city's public schools.

"Marc wants to be well thought of, to feel like he's doing things the right way," said Adam Bosworth, a Salesforce executive who left in August to work at Amazon. Bosworth recalled once disagreeing with Benioff on a management issue and sending him an email with the subject line, "You are not being a mensch."

© 2016 The New York Times News Service