- How Social Media is Impacting Corporate Transactions
- November 27, 2017 | Author: Kimbrely Dandridge
- Law Firm: Butler Snow LLP - Memphis Office
With the new millennial technology era, social media has become a very significant tool in the business world. The advancement of social media has changed the way we view and handle business transactions. Social media presents companies with a plethora of opportunities, risks, and advantages. Companies across the country have multiple social media accounts and many have implemented social media policies for employees. Numerous business transactions including buying, selling, or merging may involve the transfer of social media accounts. When preparing to engage in corporate transactions, companies should consider the following: whether social media is providing access to market and target key audiences; whether their social media is an additional asset in a transaction; and whether the public has a positive perception of the company’s social media presence.
A company’s social media accounts allow enhanced branding and marketing among consumers and competitors. It provides a wealth of insights—including data on the key markets and trends. The trends on social media could lead a company to target or identify key markets to buy additional assets in. Social media provides another avenue of information in a corporate transaction where a company is buying, selling, or merging.
Today many mergers and acquisitions (M&A) require the transfer of intangible assets including social media. Parties to corporate M&A deals should consider whether the asset acquisition agreement includes social media assets. From the business perspective, social media is considered a highly attainable asset. Many companies carry thousands and even millions of social media followers. The large followings, the direct social impact, and the influence to consumers are all considered to be beneficial acquisitions and assets, for a buyer in a corporate transaction. Google has over 19 million followers on Twitter; Starbucks has over 11 million followers; Amazon has over 2.6 million followers; and Target has over 1.9 million followers. The direct access social media provides allows companies to reach a larger audience to sell and promote products, ideas, and developments.
The larger the following the more impact a company can make. That impact can produce revenue and a strong, positive or negative, public perception. A company’s social media presence could make or break a corporate transaction. If a company has a negative public perception on social media, this could hinder a company’s ability to sell or merge.Technology and social media have made the business world more accessible, and this allows for more business transactions to occur across borders. With these advancements, companies should consistently evaluate and consider the role that social media has on their corporate transactions. The way society transacts business is constantly evolving and will continue to advance with the rise in social media.