Twitter might be looking to acquire the YouTube of Audio, or SoundCloud as it’s more commonly known. After the failure of Twitter’s music app that forced them to remove it in March, they may be looking for a second way to get into the music business.
SoundCloud, the German based audio service, has been around for a few years but still has not went public, due to lack of revenue from advertisements and premium services making it hard for investors to see it as a profitable deal.
Twitter might look to acquire SoundCloud and work on making the service more profitable, after acquiring mobile advertising company MoPub for $300 million last year, they have the resources available to make the audio service a success.
The crossover from the two platforms is large, SoundCloud music links are shared the most on Twitter and if the deal goes through, there will be a lot of crossover between the two services, meaning Twitter will not get many unique new users.
SoundCloud’s main issue, aside from not being a profitable company at the moment, is the lack of real talent uploading audio every time they announce an album or single, possibly due to the lack of revenue made on the service.
This has made a lot of the music industry keep away from SoundCloud and only upload live albums, podcasts or mixes. SoundCloud has become more than just music, podcasts about dozens of topics are added onto the service daily.
Twitter has already made the music industry adopt one of their services, if they acquire SoundCloud, they may have the understanding when it comes to advertising to actually make revenue for the artist uploading the track, similar to YouTube and Spotify.
We are not sure on the exact amount, SoundCloud was valued at $700 million after a $60 million round of funding not too long ago. Twitter could be looking at another $1 billion acquisition or even more and for a company struggling on the public stock market, they might have to loan some money to afford this deal.