Just weeks after it emerged Twitter’s plans to acquire SoundCloud fell through, it is believed the social media player is also interested in acquiring music streaming platforms Spotify and Pandora.
Twitter is believed to have backed out of talks to buy SoundCloud with speculation pointing at SoundCloud’s lack of licensing agreements to stream music as the main reason.
Both Spotify and Pandora – bitter rivals – have those licensing agreements in place.
After failing miserably at building its own music platform last year, Twitter is apparently resorting to that tried and trusted Silicon Valley of simply acquiring the technology and expertise it needs.
But is it feasible? Certainly Spotify and Pandora represent the absolute business end of the current streaming revolution and last week Apple completed a US$3bn acquisition of Beats Electronics, primarily to get its hands on the Beats Music streaming platform to ensure iTunes remains relevant for at least another decade.
Having completed a successful IPO in November, Twitter currently has a market cap of around US$19.2bn.
That said it is still a loss-making company with a net loss of US$511m in the fourth quarter of 2013.
Would acquisitions of Spotify and Pandora– each worth US$4bn and US$5bn – be a step too far? Either purchase would be Twitter’s biggest acquisition to date.
According to the Financial Times Twitter has yet to hold talks with either Spotify or Pandora.
It says that if it did make a move on either company the deal would be largely based on Twitter’s highly prized equity and similar in structure to Facebook’s acquisitions of WhatsApp and Oculus.
Twitter’s obsession with music is palpable. It recently partnered with Billboard to launch real-time charts to chart the popularity of songs shared on Twitter.
Twitter music illustration via Shutterstock