Rumor: Twitter Eyeing SoundCloud Acquisition

Twitter is rumored to be eying the German music-sharing service SoundCloud as a possible addition to its stable of acquisitions since going public last November.

The microblogging service is currently "considering a deal to acquire SoundCloud," Re/code reported Monday, citing unnamed sources.

So why would Twitter want to buy this company? For one thing, SoundCloud claims it has 250 million users who avail themselves of the Berlin-based company's free, audio-sharing platform billed as the "YouTube for audio," Re/code noted. That's a user base that's roughly the size of Twitter's own, and though there's probably some major overlap between the two user bases, Twitter may just want to buy some additional users after struggling with growth post-IPO, the site guessed.

In addition to its free service, SoundCloud has a paid service "for power users" and has indicated it wants to get into the ad game, Twitter's major source of revenue, Re/code noted, adding that if a deal is in the works, there might be some serious pressure from the Twitter camp for SoundCloud to start making sweet with big record labels.

Meanwhile, Twitter's own attempt at moving into audio- and music-sharing, the Twitter Music app, failed to gain much traction and was scrapped in March, the site noted.

If Twitter does try to gobble up SoundCloud, the deal could be a tough one to negotiate and it likely wouldn't come cheap, Re/code's sources said. SoundCloud has been valued at $700 million—to date, Twitter's most expensive acquisition has been its pre-IPO buy of ad service MoPub for $300 million.

Twitter did not immediately respond to a request for comment.