Twitter May Bid For SoundCloud To Extend Music Business

Twitter is exploring a number of ways to increase market share and give users more reason to hang around. According to reports, the social giant is even considering a bid for SoundCloud, the popular Berlin-based sound-sharing community. 

The deal, first reported by Re/Code on Monday, would plug Twitter into a network of roughly 250 million users, according to estimates.

There is no word on a price tag, but SoundCloud raised $60 million earlier this year at a reported valuation of $700 million. Neither Twitter or SoundCloud would comment on the reported acquisition talks on Monday.

Known in some circles as the “YouTube of audio,” SoundCloud would only be Twitter’s latest attempt to break into the music business.

In late 2012, Twitter grabbed music discovery start-up We Are Hunted, which it later used to launch its own music service, Twitter Music. Because of a lukewarm response, Twitter announced plans to shelve the service back in March. (As of Monday, however, the service was still live online.)  

Among other ties, Fortunenotes that Mood Rowghani -- the brother of Twitter's chief operating officer Ali Rowghani -- is a partner at Kleiner Perkins Caufield & Byers, which was an early investor in SoundCloud.

Music or no music, Twitter is not growing fast enough for many investors and social-media experts. Over the past year, monthly active users (MAUs) rose about 25% to roughly 255 million in the first quarter of the year -- markedly less than the 30% user growth that Twitter reported the previous quarter.

In addition, Twitter's domestic unique visitor levels have not improved in any material sense over the past quarter, Brian Wieser, an analyst at Pivotal Research, said late last month. “Absence of significant growth would be unsurprising to us, given our view of Twitter as a niche consumer proposition in most markets.” 

According to eMarketer, Twitter's user base will grow from about 43 million U.S. consumers in 2013 to just 65 million in 2018 -- or about half of Facebook's current domestic user base.

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