An oversimplified description of SoundCloud is that it’s essentially the YouTube for audio content. A slightly more complex explanation would be that the startup spent the last several years building itself up as an important backbone of the music industry for independent artists and others who are unable or uninterested in going the traditional route through a label. It’s also become a utility for anyone that has use of recorded audio files, such as journalists. SoundCloud currently has over 250 million active users, too.
While that’s great and all, what the heck does Twitter want with it?
This is an especially important question considering that Twitter’s last attempt at delving into music — via the Twitter Music app — failed miserably. You’d think Twitter would have resolved to leave music alone after this, but there’s still plenty of activity from active Twitter users who talk about music frequently over the social network.
SoundCloud may have little to offer Twitter’s social network, but Twitter may have plenty to offer SoundCloud. More specifically, Twitter’s new ad products could work for monetizing SoundCloud.The audio service also recently took on a new $60 million round of funding to develop a native ad strategy among other things, as Re/code’s Peter Kafka points out.
SoundCloud could also use Twitter’s resources to secure big licensing contracts with major music labels, which is something the service has previously been unable to do.
But if Twitter really is interested in buying SoundCloud, it likely won’t be cheap. The company’s last valuation is estimated at $700 million. But considering that SoundCloud just raised money, Twitter might need to spend more than that to entice the startup to sell.
We’re reaching out to both Twitter and SoundCloud for confirmation and will update this post with any new information.