As shares of NYSE-listed social media phenomenon Twitter Inc continue to plummet the prospect of a takeover bid from a rival player in the digital media space seems an increasing possibility.

The stock has collapsed in half over the past year from above US$50 to hit record lows around US$16 per share recently at a market valuation of just US$11.6 billion.

The social network’s declining value has resulted in media reports suggesting that it might be a takeover target for News Corp’s (ASX: NWS) chairman and keen tweeter Rupert Murdoch.

News Corp has reportedly dismissed the reports as untrue, although Twitter would seem an attractive target for News Corp or any other media business looking to grow its digital reach and influence around the world.

Others that could be potentially interested in a takeover are Alphabet Inc (the company formerly known as Google), Facebook Inc (which has recently acquired Instagram and Whatsapp), news agency and information firm Thomson Reuters, or even Aussie telco giant Telstra Corporation Ltd (ASX: TLS).

Twitter’s main problem is the softer-than-expected user growth, which is the key proxy for revenue growth as advertising fee growth is implicitly linked to user growth.

Rapid user growth has not been a problem for rivals like Instagram or Facebook and Twitter’s management team continues to work on improving its broader appeal. One problem for Twitter is that potential new users are commonly turned off by a lack of followers as the network has failed to gain the critical mass required to create exponential growth.

As a consequence new users effectively have little reason to tweet with only a handful of followers and this limits the network’s appeal to members of the public that already interact on social networks multiple times a day via Facebook or Instagram for example.

Despite Twitter’s problems its digital presence, potential and growing influence over the public sphere mean it will remain an attractive target to old-world news publishers like News Corp that must adjust to the digital future in order to stay profitable and retain their powerful influence over the public sphere.

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Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.