Social media companies have been growing at a great clip over the past few years and although it is true that Twitter, perhaps the most well known social media website in the world, has gone through troubled times for the better part of a few years due to a range of issues, it still remains one of the giants of Silicon Valley. In a recent development, the company has decided to make an acquisition that would help it in gaining a foothold in the streaming business with a $70 million investment in the paid streming service provided by German company Sound Cloud limited. According to a report on Bloomberg, the total investment for Sound Cloud could go up to as much as $100 million in this particular investment round. In the process, the total valuation of the company would be pegged at a neat $700 million.
Sound Cloud released a statement regarding the investment, stating "We can confirm that Twitter has made an investment". It went on to add, that the fresh influx of funds are going to be used so that the company can "continue the global roll-out of many company initiatives such as our recently launched subscription service, SoundCloud Go."
The Bloomberg further explained the raionale behind the deal, "While SoundCloud's massive, engaged user base has tantalized the recorded music industry for years, it had been under increasing pressure to develop a paid service after failing to turn its reach into sustainable revenue streams. SoundCloud, which says it has 175 million monthly users, released the premium service in March and has completed deals with major music labels, as well as publishers and independent labels.
Twitter has previously tried to integrate music into its product and in 2014 considered buying SoundCloud, people familiar with the situation said at the time. Twitter has invested in startups including smart headphones developer Muzik and mobile marketing platform Swirl."
