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Monday, July 18, 2016

TWITTER invests in SOUNDCLOUD



A little bird has told multiple media sources that social networking site Twitter has done a heavy investment on audio streaming service SoundCloud some two years after the “SMS of the Internet”
briefly entertained, and then eventually abandoned a plan to buy out the latter as a major addition to its social media platform. Apparently they decided now to just buy a piece instead of the whole thing.

Tech news website Recode.net was the first to break the news of Twitter investing a tidy sum of $70 million in SoundCloud, seemingly the opening salvo of a funding round that is expect to climb all the way up to the range of $100 million in total. This big venture now puts the music service, based in Berlin, at a current valuation of around $700 million according to the Financial Times.

Jack Dorsey, co-founder and CEO of Twitter, confirmed his company’s investment, but declined to elaborate further on specific details on the financial aspect of the deal. All he would say was that their
new capital arm, Twitter Ventures took its stake to help support SoundCloud, as “they've been great partners of ours over the years and their community-supported approach mirrors ours in many ways”. Since 2014 after the aborted standalone “Twitter Music” service from the year before, Twitter users have been able to share music tracks on SoundCloud with their feed, allowing them to play whole songs without needing to go out of the Twitter site.

Techcruch.com reported that the two companies have been is rough waters lately, with Twitter languishing in Wall Street due to a massive slowdown in new users signing up, and SoundCloud suffering a major setback when their recently-opened “SoundCloud Go” premium service failed to generate wide interest in the streaming market with its $9.99 monthly fee. The audio service had stated earlier this year that they were in sore need of a cash infusion as it continues its efforts to sign up deals with major music labels worldwide.

A spokesperson for SoundCloud also commented that the $70 million investment helps both companies “facilitate and inspire contemporary culture to happen in real time while reaching millions of people around the world. This investment will enable SoundCloud to remain focused on building value for creators and listeners alike and to continue the global rollout of many company initiatives such as our recently launched subscription service”. SoundCloud has been struggling to generate money from its popularity with amateur up-and- coming musicians who use their service for self-promotion, to middling success.

Whether this transaction will become a more long-term strategic partnership between Twitter and SoundCloud remains to be seen, but already experts and analysts see an integration between the two companies as a surefire way to grow further.

Photo Credit to www.xlr8r.com

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