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Twitter Is Said to Be in Continued Talks With Salesforce

SAN FRANCISCO — Over the last week, Twitter’s fate has appeared to be murkier than ever. The troubled social media company, which has been engaged in talks to sell itself, seemed to be running out of potential buyers.

But inside Twitter, executives are continuing deal talks with at least one suitor, the online software company Salesforce.com, according to two people involved in the discussions who spoke on condition of anonymity because the strategizing is private. The talks are continuing even though Salesforce has faced pushback from some of its biggest investors over a potential acquisition.

Jack Dorsey, Twitter’s chief executive, is now not averse to selling the company as long as it is what is best for the integrity of the product, according to two people involved in the talks. That is a shift of heart for the chief executive from last month, when Mr. Dorsey was said to be resistant to a deal because he was concerned Twitter would be sold for parts.

At the same time, Twitter’s executives are pressing on as if the company will remain an independent entity, said the people involved in the negotiations. While Twitter executives think they have clarified the social media company’s mission and focus, which now revolves around live events and live commentary, they had feared they were running out of time to achieve their goals given the volatility of its stock and investor skepticism over its prospects.

The multipronged strategy gives a glimpse into how Twitter is internally trying to come to grips with its path forward amid a shifting chess match of deal talks and considerations. Even as Twitter is in the spotlight as a go-to discussion forum during this presidential election cycle, the challenges the company faces remain acute.

Twitter, which will report its next quarterly earnings on Oct. 27, is still wrestling with questions about its growth in users and revenue. The company, which is based in San Francisco, also faces mounting concerns around the potential threat of an activist shareholder lawsuit, a choppy stock price and a growing internal fear among employees that it is susceptible to forces outside of their control.

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Jack Dorsey, chief of Twitter, is said to not be averse to selling the company, as long as it maintains the integrity of the product. Credit Yana Paskova/Bloomberg, via Getty Images

Mr. Dorsey was in the middle of a major turnaround effort, an attempt to stanch the bleeding of users and reinstall faith in the company with new efforts around live streaming video. Mr. Dorsey, executives and many on the board wanted more time to prove Twitter could work as an independent company, even as they had a fiduciary duty to consider all options.

A Twitter spokeswoman declined to comment. Salesforce also declined to comment. The internal state of affairs at Twitter and its likely options was described in interviews with more than a dozen current and former employees.

Rank-and-file staff members are frustrated about being in the dark on the company’s future, and a handful of employees have stopped showing up for work entirely, several insiders said.

Morale has deteriorated over the last year, especially amid rumors of more layoffs at the company — some took place a year ago. Employees said management handled the situation poorly when at one point, some of them discovered access to a digital folder on Twitter’s network that had the names of people who were to be dismissed, before any announcement being made. Eventually, Twitter announced it would cut more than 300 jobs.

Mr. Dorsey has been trying to rally the troops, sending two companywide memos, one in mid-September and one last week, which were obtained by The New York Times. In the September note, Mr. Dorsey struck a consoling tone to employees, and noted the progress around Twitter’s live streaming of a Thursday night N.F.L. game to be broadcast that day. But he did not offer clarity on the rumors surrounding the company’s potential acquisition, leading to further internal speculation and grumbling.

Despite the drama, there is a bright spot for Twitter executives: The company’s focus on live efforts, however nascent, are beginning to bear some fruit.

One measure that is on the rise is Twitter’s logged-out live stream viewers — that is, people who watched the live streamed N.F.L. game who do not hold Twitter accounts — accounting for about 15 percent of total viewership of the company’s first handful of N.F.L. games, according to two people with knowledge of the viewership numbers. That syncs with Twitter’s overall thesis that its platform extends beyond those who hold Twitter accounts.

As far as logged-in Twitter accounts are concerned, the company reported three million new users last quarter. People familiar with the company’s metrics expect that growth to continue.

Twitter executives are also focused on making Twitter profitable. Since going public in November 2013, the company has yet to turn a profit, particularly because of a large stock-based expenses related to employee compensation and high research and development costs.

As a result, Twitter is looking at divesting some noncore businesses. Those include Vine, the six-second video sharing app, which has been bleeding users and executive staff. Twitter is also considering selling off Fabric, a mobile developer platform that the company launched in 2014, from which effectively it did not make money.

Twitter earlier held separate talks with Microsoft about a potential acquisition of Fabric, according to four people involved in the matter. Those preliminary talks stalled when rumors of a possible sale of Twitter to Salesforce spilled out since Microsoft and Salesforce compete with one another, these people said. It is unclear if the talks will resume.

I.B.M. was also approached about a deal. Microsoft and I.B.M. declined to comment.

Twitter is also considering new layoffs. As of the company’s most recent earnings report, Twitter employs nearly 4,000 staffers in more than 35 offices worldwide.

“I empathize with the feelings that come from the constant critique, the constant negativity, and the constant doubt,” Mr. Dorsey wrote in the companywide memo last month. “But hey, that’s life in the arena. All we control is how we choose to react to it.”

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