Business -- Corporate Finance - Net Present

Business -- Corporate Finance - Net Present Value - Mergers & Acquisitions -- SLP Facebook

the Merger of Facebook, Inc. And Twitter, Inc.

Choosing a company to merge with Facebook, Inc. is a difficult task because Facebook, Inc. is a huge, valuable, cutting-edge company. When forced to choose a prospect for merger, I would settle on Twitter, Inc. (Yahoo! Finance, 2013). First, both companies are in the Technology/Internet Information Provider field, so there is some commonality of technology and service (McClure, Mergers and acquisitions: Definition, 2009). Secondly, Twitter is state-of-the-art technology, using social networking and microblogging using instant messaging, SMS or web interfaces (Twitter, Inc., 2013) with an undeniable level of popularity. Meanwhile, Facebook, Inc. is constantly striving for cutting edge forms of providing technological information. Consequently, the two companies share an aggressive corporate culture that pursues the most advanced provision of internet-based information (McClure, Mergers and acquisitions: Why they can fail, 2009). Third, Twitter is a highly lucrative company: though it was recently downgraded, the company's stock hit a 52-week high of $60.24 just today (Fazekas, 2013) and its intraday Market CAP of $30.84B (Yahoo! Finance, 2013) would be highly attractive to Facebook shareholders. Fourth, Facebook's gains of Twitter's market share, technology, efficiency and synergy in the daily internet communications business would all be valuable assets sought in a merger (Gaughan, Mergers, acquisitions and corporate restructurings, 2011, pp. 132-4): in sum, their combined business activities will significantly increase performance while decreasing costs. Fifth, merging with Twitter will allow Facebook to diversify somewhat into provision of a communications type that it currently does not offer. Sixth, Facebook will be neutralizing a significant competitor by merging with Twitter. Finally, Twitter is still so much smaller than Facebook, Inc. that Facebook can control many of the decisions and logistics of merger. For all those reasons, Twitter seems an attractive company for merger with Facebook.

2) Facebook, Inc.'s Merger with Google, Inc. Or Yahoo, Inc.

Google, Inc. And Yahoo, Inc. would also seem to be likely choices for merger with Facebook, Inc., though they would be second or third choices. Both would be logical choices because both Google, Inc. (Yahoo! Finance, 2013) and Yahoo, Inc. (Yahoo! Finance, 2013) are in the Technology/Internet Information Provider field and both have notable shares of the market. Consequently, both would be attractive in those respects for merger. However, Google, Inc. would not be the first choice for merger for basically two combined reasons: it is even more powerful/valuable (Yahoo! Finance, 2013) than is Facebook, Inc. (Yahoo! Finance, 2013) and just as Facebook's management team is "hands on" (Jana, 2013), so is Google's (Google, Inc., 2013); consequently, I foresee a considerable power struggle and difficulty literally merging all the resources of these two giants. Yahoo, Inc. is not the first choice for merger, either: not only is it considerably smaller/less valuable (Yahoo! Finance, 2013) than is Facebook; Yahoo also has a corporate culture described as "notoriously dysfunctional and disorganized" (Foremski, 2013), which would severely complicate and perhaps even defeat a true merger of Facebook's and Yahoo's people and processes. In sum, while Google, Inc. And Yahoo, Inc. are possible merger targets for Facebook, Inc., their finances and corporate cultures militate against effective merger.