Last month, reports surfaced that Twitter Inc (NYSE:TWTR) was planning to acquire German audio sharing platform SoundCloud. But The Wall Street Journal rubbished those reports. Turns out, the microblogging company was really in talks to buy SoundCloud, three sources familiar with the matter told the Financial Times. In fact, Twitter also considered making a bid for other online music companies Pandora Media Inc (NYSE:P) and Spotify.

Twitter SoundCloud

Twitter weighted up deals worth billions of dollars

Though Twitter Inc (NYSE:TWTR) was eyeing all three companies, it engaged in talks only with SoundCloud. The company had weighted up deals worth billions of dollars, meaning that any of these deals would be Twitter’s largest ever acquisition. Amid slowing user growth, the San Francisco-based company is looking for ways to boost the amount of time users spend on its platform. Twitter stock has tumbled more than 45%.

SoundCloud allows users to record, upload, share and promote their audio and music files. In a funding round in January, the company was valued at $700 million. SoundCloud is backed by Index Ventures, Union Square Ventures and Kleiner Perkins. Twitter Inc (NYSE:TWTR) had previously experimented with its own Music app. But that turned out to be a dud and the company closed it in March. The company has extensively expanded its website and app to carry multimedia content. Last year, the Dick Costolo-led company acquired an Australian music streaming startup “We Are Haunted.”

Twitter doesn’t have enough cash to buy music service companies

Twitter Inc (NYSE:TWTR)’s renewed interest in music service provider comes as Apple Inc. (NASDAQ:AAPL) purchased Beats Electronics for $3 billion. The acquisition of Beats was seen as the iPhone maker’s attempt to regain its leading position in the music business as iTunes sales continue to decline. Twitter’s search for a music company is headed by COO Ali Rowghani, sources said. In late 2013, Spotify was valued at $4 billion while Pandora Media Inc (NYSE:P) has a market value of $5.14 billion.

However, analysts believe Twitter Inc (NYSE:TWTR) doesn’t have a large cash reserve to acquire a music service. The company remains unprofitable. Twitter raised $2.1 billion in its November 2013 IPO, and has secured a $1 billion credit line.

Twitter Inc (NYSE:TWTR) shares surged 1.70% to $33.46 at 9:40 AM EDT on Thursday.