Twitter might be preparing their biggest acquisition to date, for German audio-service SoundCloud. The service has been around for a few years and offers artists and podcasters a place to upload their audio.
This looks to still be a big area of impact for Twitter, even if their own Music app failed to take off and was dropped in March this year. Twitter might look for a complete solution this year, to avoid any failure.
SoundCloud is the most popular audio service on Twitter, with their users sharing more audio links from this service than any other competing service, even Spotify and Last.fm.
This will mean if Twitter acquires SoundCloud, we will not expect to see millions of users convert to the microblogging Website from SoundCloud, even though both have around the same amount of active monthly users.
Twitter is obviously looking for new portals into revenue and even though SoundCloud has always struggled to maintain enough revenue to be self-reliant, Twitter’s new advertising subsidiaries might be able to help out.
SoundCloud recently completed a round of funding and valued the company at $700 million. For Twitter, that looks to be around a $1 billion offer to make it through SoundCloud’s management and interest the German based service.
Music is very shareable and Twitter wants users to share SoundCloud music onto their microblogging Website. Viral news is good for Twitter, it gives them revenue as more people head over to check the link and can influence people to check out sponsored links.
That being said, Twitter is currently not in a position to offer such a high acquisition price. They will have to look for a loan to complete the deal, after the devastating run of form on the stock market, with their price dropping from high $60 to almost under $30, showing investors distrust in the young company.