Twitter May Acquire SoundCloud

Twitter May Acquire SoundCloud

Recent reports have given indications that Twitter may be taking into consideration the acquisition of SoundCloud. The Germany-based company provides individuals, bands or DJ groups to upload as well as share audio clips.

Recode revealed that the social networking company may be discussing the possibility of acquiring the Germany-based company that is popular as the audio version of YouTube. The move may be a major step for the social networking company, which has investors anxious that the company is not growing fast enough. This resulted to a dip in the price of its shares from its peak price of $74.73 to $32.36.

When the company went public in November, shares were offered at $26 per share.

One of the reasons that Twitter may attempt to acquire SoundCloud is the desire of the social network company to become close to the music industry. The company was unsuccessful with its attempts when it launched #Music app. Another reason is to increase its subscriber based since SoundCloud reportedly has around 250 million users across the globe. No statements were released by the two companies in connection to the reports.

The acquisition of SoundCloud may be expensive for Twitter since the audio sharing company was able to raise around $60 million in funding last year. This raised its value to around $700. For the moment, the most expensive acquisition of the social networking company was MoPub, which was acquired at a price of around $350 million.

SoundCloud may also find its acquisition by the social networking company appealing since the latter is successful in it campaign of selling advertisements. Although the company already offers premium service for users who pay for it, it does not have any system in terms of advertisements.

The acquisition of SoundCloud by the social networking company is practical according to a number of industry watchers. Brian Blau of Gartner said Twitter will be able to increase its business if it acquires SoundCloud, especially if the latter is able to acquire a favorable music licensing deal for its users.

Posted by James Fried on Wednesday May 21 2014, 7:18 AM EDT. Ref: CNET. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0