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Twitter Inc.'s shares plunged 14% on Monday as the odds of a sale appeared to dim further, shifting attention back to the social-media company's troublesome pursuit of a strategy to jump-start user and revenue growth.

The San Francisco company planned to field offers from suitors last week after Salesforce.com Inc., Walt Disney Co. and Alphabet Inc.'s Google expressed interest or weighed bids, people familiar with the matter have said.

But Salesforce is re-evaluating its interest in buying Twitter after the software company's shares plummeted on news of the potential offer, according to a person familiar with the matter. Google isn't expected to make a bid, another person said last week. Disney reportedly isn't likely to bid either.

The prospect that Twitter will need to go it alone is weighing heavily on its stock, which had shot up about 33% through last Wednesday following news in late September of possible talks. Since Thursday, investors have sent the shares down about 31% to $17.17, below where it was at the time of the original news reports, and wiping about $5 billion from its market capitalization.

With a market value now of about $12 billion, a buyer could still step in, especially if Twitter's shares continue to crater. For now, CEO Jack Dorsey would face added pressure to show his new live-video strategy, various product changes and advertising initiatives are leading to meaningful user and revenue gains.

In his first 12 months since returning as CEO in July 2015, Twitter added only 9 million monthly users to give it 313 million, while Facebook Inc. added about 160 million monthly users in that time frame. Twitter's quarterly revenue growth shrank to under 20% from 61% in the quarter before Mr. Dorsey returned.

Mr. Dorsey's next test comes on Oct. 27 when the company reports third-quarter earnings. A Twitter spokeswoman declined to comment.

"It's hard not to look at this and view Twitter as being a somewhat tainted asset that potentially strategic bidders don't seem to be interested in," said RBC Capital analyst Mark Mahaney. Advertisers could become less inclined to seal long-term deals and it could make it more challenging for Mr. Dorsey to hire talent when the company could wind up on the chopping block, he said.

Mr. Mahaney downgraded Twitter's stock last month to $14 a share after a survey of 1,100 advertising professionals by RBC revealed that a higher percentage of respondents plan to reduce spending on Twitter than those who plan to increase it.

For advertisers, a potential sale raised "mixed emotions" because a marriage with tech giants such as Google or Facebook Inc. could have helped advertisers reach a wider audience with the benefit of Twitter's user data, said Bryan Wiener, executive chairman at digital marketing agency 360i, whose clients include Nestlé SA and Time Warner Inc.'s HBO.

Twitter is banking part of its future on live video, the cornerstone of a broad push into video advertising. Twitter paid $10 million in April for the rights to live-stream 10 Thursday night National Football League games in a high-profile deal to lure a more mainstream audience and command premium advertising rates.

Twitter offered NFL sponsorship ad packages ranging from $1 million to $8 million for the season. With only a few streamed games under its belt, it is too soon to deem the strategy a success or failure.

Last Thursday, an average audience of 236,000 viewers a minute watched the Arizona Cardinals beat the San Francisco 49ers during Twitter's third NFL live-stream, according to the NFL. That was down from the previous two games, and paled in comparison with the average of 17.5 million people who watched the game on CBS or the NFL Network.

If Twitter can't turn things around, it may follow a similar path as Yahoo Inc., the internet portal that never regained its footing after it was eclipsed by Google and Facebook in the digital-ad business. Twitter and Yahoo each command less than 2% of world-wide digital-ad revenue, according to eMarketer.

Like Twitter, Yahoo has a strong presence in the digital lives of hundreds of millions of people. But it failed to build a sustainable moneymaking business as its various CEOs seesawed between tech, commerce and media strategies.

Yahoo CEO Marissa Mayer's attempts to refresh the company around video and search didn't generate meaningful revenue growth after more than three years, compelling activist investor Starboard Value LP to pressure the company into a sale. Yahoo in July agreed to sell its core web business to Verizon Communications Inc. for nearly $5 billion.

Josh Elman, a Twitter shareholder and partner at venture-capital firm Greylock Partners, said all isn't lost yet. With the exploration of a potential sale behind it, Twitter could refocus and restart with the right people.

"I don't think anything dramatically has changed," said Mr. Elman, who worked as a product manager at Twitter. "They just have to really figure out if they can build a stronger network."

Write to Yoree Koh at yoree.koh@wsj.com

(END) Dow Jones Newswires

October 10, 2016 16:05 ET (20:05 GMT)

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