Twitter has largely sat on the sidelines while larger companies like Google, Facebook and even Apple make multi-billion dollars acquisitions, but the company could make a flashy purchase of its own in the near future. Re/code reports that Twitter may buy popular music-sharing service SoundCloud, which was valued at $700 million earlier this year.
A SoundCloud acquisition could help Twitter quickly expand its user base, an issue that’s recently plagued the company as its growth noticeably slows down. SoundCloud describes itself as “YouTube for audio” and boasted 250 million users back in October 2013, while Twitter just hit 255 million active users last month. There’s likely significant overlap between people who use the two services, though the deal would still give Twitter a decent boost in total users.
Twitter has experimented with music apps in the past, even launching its own Twitter Music service. The app never really caught on though, and Twitter shut it down earlier this year. SoundCloud offers a solid user base and strong name recognition, but hasn’t set up any deals with major music labels for much of the copyrighted music hosted on its website. This could be a legal issue for Twitter down the road and an obstacle for any acquisition, though according to Re/code there’s still no guarantee the buyout will actually happen.