Rumours are surfacing that Twitter is “considering a deal” for a potential buy out of SoundCloud in order to stop the downward trend of their stocks.

Twitter has an obvious yearning to more closely align themselves with the music industry and has previously experimented with entering the music market, namely through its own failed #Music app that never gained any real traction and thus consequently shut down in March. The desire to take advantage of the sound sharing host derives primarily for the vast quantities of music related content being promoted on Twitter feeds. With an estimated 250 million users worlwide, SoundCloud is undoubtedly the leader in audio streaming services and with Twitter’s drastically decreasing share value it’d make sense for the company to seriously contemplate the buyout.

Valued at an initial $26 a share, the company’s value quickly rose all the way up to a staggering $74.73, yet currently sits around the $33 mark – leaving investors ostensibly worried. Such decline in growth has been attributed to a stagnant user base. Soundcloud – like Instagram with Facebook – could seemingly increase overlap between users of both social media outlets and would provide a further platform for Twitter to promote its services, rather than purely relying on sharing information exclusively from its site. This of course will all come at an extreme cost for the tech giants, with SoundCloud being valued at $700 million.

Unfortunately for regular SoundCloud users like ourselves it could severely affect the ways in which the audio sharing site is currently configured. Those in charge of SoundCloud would strongly an offer, as the revenue bolstering affect of Twitter’s well established advertising could be too good to refuse. There are some limited revenue making opportunities, in the form of specialised paid SoundCloud accounts with some added features to the basic account, yet no real advertising generated income. Surely this means a step towards a Spotify based advertising model, with streams being constantly and frustratingly interrupted – one of the true benefits of SoundCloud over other audio streaming services.

Re/Code, who are reporting on the potential deal, also argue that any deal could be damaging to SoundCloud’s current status with large distributors/music labels regarding any copyright infringements that have somewhat been lackadaisically monitored, and may force them to strike up a deal similar to YouTube with Google.

Although parties from both sides have refused to comment so far, it certainly isn’t something that we’re overly excited about. It is highly probable that such a deal could occur, as it makes commercial sense for both parties. We could wind up with another Ad saturated streaming product – much to our chagrin.

Source: Re/Code