Twitter Could Benefit From Spotify, SoundCloud Deal

Twitter Could Benefit From Spotify, SoundCloud Deal
Photo by edisona (Pixabay)

Twitter could benefit from Spotify’s acquisition of music streaming service SoundCloud. On Wednesday, the Financial Times reported that Spotify is in “advanced talks” to buy SoundCloud for a not-yet-revealed sum.

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How does Twitter benefit from this?

For SoundCloud, an acquisition would be good news as it has struggled to gain attention with its paid streaming services. For Spotify, it would take one more rival off the market and get access to SoundCloud’s large catalog of 125 million songs. So you must be wondering where Twitter fits into this.

According to Re/code, the micro-blogging site invested $70 million in SoundCloud in June. The music streaming service was reportedly valued at $700 million at that time. This means that the micro-blogging network stands to get a nice sum from the sale if it takes place, notes Business Insider.

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Twitter has been struggling to grow its business and has seen its stock decline steadily over the past year. A SoundCloud payout would probably be good news for the social network. In addition, it would represent an ironic parallel between Yahoo and Twitter. Yahoo, another struggling Internet company with a core business disliked by investors, profited from an investment in Alibaba, notes BI.

Investors loathe idea of a Disney-Twitter deal

Rumors regarding Twitter’s own buyout are not ending either. On Monday, Disney’s stock dropped after reports of its interest in the micro-blogging network surfaced. This drop can be an indication that investors probably do not want CEO Bob Iger to get involved in Twitter. Also BTIG analyst Richard Greenfield says that Disney is a long-shot to acquire the social media platform.

Twitter, which has its own set of issues like being too hard to understand or search, having too many trolls and too much noise, etc., appears to have scored a touchdown with its recent live streams of NFL games. Also it live-streamed the presidential debate on Monday and will live-stream the final two presidential debates and the vice presidential debates as well.

At the very least, the videos and tweets of marriages are appealing to Twitter’s hardware base of users. But the main question which remains unanswered, is if the social network will be able to do something to increase its user base.

On Wednesday, Twitter shares closed down 3.2% at $22.96. Year to date, the stock is up more than 3%, while in the last year, it is down more than 9%.

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