Disney's Bob Iger Abandoned 2016 Twitter Deal Over "Substantial" Number Of Bots

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by Tyler Durden
Thursday, Sep 08, 2022 - 04:05 PM

Elon Musk got a huge boost from former Disney CEO Bob Iger, who revealed he backed out of a 2016 deal to purchase Twitter because a "substantial portion" of the social media platform's users were "not real." 

In an interview at Vox's Code Conference in Beverly Hills, California, Iger said Walt Disney Co was about to purchase Twitter in 2016 because it would've been an efficient way to distribute Disney's content worldwide. 

He said it was determined that "a substantial portion - not a majority -" of users were fake, indicating he had to discount the company's value because of the bots. Though there was little clarity, in percentage terms, on what he meant by "substantial."

In response to a question via The Verge's Alex Heath, Iger explained more about the Twitter deal and how it could've been a "phenomenal" distribution platform for Disney but came with too many headaches (bots): 

"We were intent on going into the streaming business. We needed a technology solution. We have all this great IP. We weren't a technology company. How do we get that IP to consumers around the world? … And we were kicking tires left and right. We thought about developing ourselves. Five years, $500 million. It wasn't the money, it was the time, because the world was changing fast. And at the same time, we heard that Twitter was contemplating a sale.

"We enter the process immediately, looking at Twitter as the solution: a global distribution platform. It was viewed as sort of a social network. We were viewing it as something completely different. We could put news, sports, entertainment, [and] reach the world. And frankly, it would have been a phenomenal solution, distribution-wise.

"Then, after we sold the whole concept to the Disney board and the Twitter board, and we're really ready to execute — the negotiation was just about done — I went home, contemplated it for a weekend, and thought, 'I'm not looking at this as carefully as I need to look at it.' Yes, it's a great solution from a distribution perspective. But it would come with so many other challenges and complexities that as a manager of a great global brand, I was not prepared to take on a major distraction and having to manage circumstances that weren't even close to anything that we had faced before.

"Interestingly enough, because I read the news these days, we did look very carefully at all of the Twitter users — I guess they're called users? — and we at that point estimated with some of Twitter's help that a substantial portion — not a majority — were not real.

"I don't remember the number but we discounted the value heavily. But that was built into our economics. Actually, the deal that we had was pretty cheap.

"Then you have to look, of course, at all the hate speech and potential to do as much harm as good. We're in the business of manufacturing fun at Disney — of doing nothing but good, even though there are others today that criticize Disney for the opposite, which is wrong. This was just something that we were not ready to take on and I was not ready to take on as the CEO of a company and I thought it would have been irresponsible."

Iger dropped a gold nugget of information for Musk, who is locked in a court battle with the social media company to purchase it for $44 billion. Musk has been trying to exit the deal because he claims the company misrepresented the number of bot accounts. 

Twitter has maintained its platform has fewer than 5% of its "monetizable" daily users are bots, though it appears a growing number of influential voices, not just the world's richest man, are saying that's incorrect. 

In response to a tweet about Iger's comments. Musk tweeted: "Interesting ..." 

Meanwhile, Twitter's legal team has sued Musk to fulfill his obligation to buy Twitter. Musk's legal team had requested that the trial occur early next year, but the court ruled the trial is set to begin on October 17

Musk's legal team, however, has been allowed to add whistleblower claims from Twitter's former head of security, Peiter "Mudge" Zatko, who claimed that Twitter had alleged "extreme, egregious deficiencies" regarding privacy and security and that executives misled the board of directors on such issues. This could give Musk the ability to show the court that Twitter breached the merger agreement's terms.