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 across several different platforms 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 (is material in the buying and selling of goods/services); 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 like certain intellectual property, but this includes 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. The direct access social media provides allows companies to reach a larger audience to sell and promote products, ideas, and developments. Social Media can also be an indicator of goodwill of the business and its overall standing and presence in society.
The larger the following the more impact a company can make across different spectrums of its business and the economy. 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. If an M&A deal is being done, it is definitely worthy of drafting provisions into the final agreement that account for the rights to all social media platforms, access, passwords, followers lists, etc. There is no doubt it can be considered an asset in an M&A deal depending upon the parties’agreement and the terms associated with the final documents. It is important not to forget the value of social media.
Your Business, Refined. Your Social Media, Defined.