Twitter Working on Deal for SoundCloud
This is a pretty big week for business acquisitions. First, it was all about YouTube’s reported purchase of Twitch. Then, there was the story about AT&T buying DirecTV for billions of dollars but only if the NFL renewed its Sunday Ticket deal. Now, Twitter decieded to get in on the action. A new report suggests that the social media / microblogging website is in talks to buy online audio-sharing website SoundCloud.
The price being discussed has not been reported. However, a recent round of investment into SoundCloud valued the company at over $700 million.
It’s believed that user base growth is Twitter’s target with this acquisition. Both companies report having around 250 million users. Twitter’s investors have been disappointed with the company’s growth since the launch of its IPO. While it’s believed that there is some overlap in the user base, the hope is that this creates a sizable jump in Twitter’s user numbers.
This addition might also replace the shuttered Twitter Music service that was discontinued in March. I’d tell you what it was but I didn’t even know it existed. I’d imagine that was the primary reason why it died. If no one knew about it, how could anyone use it. Since people know that SoundCloud exists, it already has a head start over Twitter Music.
From SoundCloud’s perspective, the deal could help the company monetize their service. While Twitter is slowly figuring out how to monetize, SoundCloud is just starting its attempt. Bringing Twitter’s internal and acquired know-how, that would help them become more sustainable.
As a Twitter user but not a SoundCloud user, I’m not sure how the two companies would synergize (I hate that word). That’s where the value of an acquisition should come. I don’t see how this deal would benefit Twitter. SoundCloud might benefit from more exposure and better Twitter integration but I don’t see how this helps Twitter. They better see something I don’t or they’d be just as well off burning their money.