Disney Considers Offer for Twitter

Walt Disney Co. on Monday emerged as another potential bidder for Twitter Inc., the struggling social-media service, people familiar with the matter said.

Twitter, with a stock-market value of about $20 billion, has also held preliminary talks with Salesforce.com Inc., according to people familiar with the matter.

The sale process is in early stages and it is far from guaranteed that anyone will end up buying Twitter.

The takeover talks have been fueled by Twitter's sluggish growth in users and revenue, perennial turnover among senior executives and a lack of mission and business plan as focused as those of competitors like Facebook Inc.

Twitter shares rose 3.3% to $23.37 on Monday, after rising 21% on Friday when news of Salesforce's interest emerged. Disney stock fell 1.4% to $91.96 a share on Monday.

A Twitter acquisition would be Disney's biggest technology deal yet, following recent investments in Hulu and Vice, among others.

Recent moves by Twitter into streaming sports events online have attracted the attention of Disney Chief Executive Robert Iger. In August, the Burbank, Calif.,-based media giant said it was spending $1 billion for a 33% stake in BAMTech, a streaming-media company created by Major League Baseball that Twitter is using to live stream sporting events.

Since Disney owns ESPN, the media giant could view Twitter's sports-programming efforts as creating a potential rival�or, in the event of a successful acquisition, it could be a source of technology that could benefit ESPN as cord-cutting becomes more widespread.

Mr. Iger offered a positive assessment of the BAMTech-Twitter partnership in a question-and-answer session at an investor conference held by Goldman Sachs earlier this month.

"I thought Twitter actually did a very good job," he said, referring to one of the National Football League games that the site had hosted. "That platform was powered by BAMTech last week and will be, which I think says a lot about that platform because it was very stable."

Disney's investment in BAMTech, which could eventually expand to a majority stake, was seen by Wall Street as an olive branch after investor concerns about slowing subscriber growth at the company's ESPN cable channel.

Mr. Iger described Twitter at the Goldman Sachs conference as a "new entrant" in the arena of sports rights but also defended his own subsidiary. "You have to think about monetization capabilities of these new entrants," he said. "Nobody can monetize sports better than ESPN," he said.

Twitter and Disney also have ties through Twitter CEO Jack Dorsey, who has served on the media company's board since 2013. He has looked to Mr. Iger as a mentor, especially as Mr. Dorsey has had to wade through the diverse demands of the two companies he co-founded and runs: Twitter and payment company Square. In an interview last year, Mr. Iger told The Wall Street Journal he occasionally counsels the younger CEO on business matters. "I am not involved in his businesses, so I am a good sounding board for him," Mr. Iger said.

Disney's potential interest in Twitter was reported earlier by Bloomberg.

Disney has a mixed record when it comes to acquiring technology companies�all of which have been much smaller than Twitter.

In 2014, it paid an initial $500 million for Maker Studios, an online video producer popular among younger viewers finding their entertainment on YouTube Inc. An additional $450 million was promised if Maker met certain performance targets, but Disney ended up paying only $175 million, according to filings with the Securities and Exchange Commission.

Maker's CEO, Ynon Kreiz, left the company last year, and several other high-ranking executives have departed since the Disney acquisition. Maker announced it was laying off an unspecified number of workers earlier this year.

Not all Disney's tech acquisitions have been well-timed. Disney bought the social-gaming company Playdom Inc. for $563 million in 2010, not long before social games plummeted in popularity.

Disney Interactive, the company's videogame and online-content division, merged with Disney Consumer Products in 2015 following years of losses and layoffs.

It turned a corner to profitability following layoffs that eliminated a quarter of its staff in 2014 and the launch of the "Disney Infinity" videogame. But in May, Disney announced it was booking a $147 million charge and canceling the "Infinity" line, a move that cut between 250 and 300 jobs and closed a studio in Utah.

Yoree Koh contributed to this article.

Write to Dana Cimilluca at dana.cimilluca@wsj.com, Joann S. Lublin at joann.lublin@wsj.com and Erich Schwartzel at erich.schwartzel@wsj.com