Jan 07, 2017 09:01 AM EST
Google Contemplates Acquiring SoundCloud for $500 Million [Video]
Google is reportedly interested in snapping up SoundCloud for a whopping $500. The Berlin-based boasts of more than 175 million users all over the globe.
Earlier last year, Spotify was said to have taken a liking to SoundCloud and was intent on acquiring the company, however, SoundCloud's selling price for $1 billion was too high a stake for the company to seal the deal. The same price tag was also reportedly responsible for putting off Twitter in buying into the company back in 2014, according to Music Business Worldwide (MBW). Instead, Twitter reportedly bought a 10 percent stake in the company raising its value to $700 million.
Reports now state that SoundCloud can be had for a price somewhere close to $500 million and Google is reportedly the current favorite to bag the deal. SoundCloud's financial filings obtained by MBW have shown that aside from Twitter, Universal, Sony, and Warner all own stakes in the business.
According to MBW's rough estimate, Universal owns four percent stake in SoundCloud, followed by Sony's three percent, and Warner around two percent. The three combined would give the companies a cut of about $45 million out of the $500 million if the sale pushes through.
SoundCloud needs a buyer
Though having a wide reach, for having over 175 million subscribers, SoundCloud still struggles to compete with Apple and Google finding ways to monetize itself. Its new SoundCloud Go subscription service providing ad-free offline service, giving users access to more songs, for a $10, monthly fee did not help it much since it has not gained much traction, 9To5Google reported.
Though nothing has been said of the reported buy in either from Google or SoundCloud, it is likewise rumored that a few other companies are interested in acquiring the music streaming company. It cannot be confirmed if the acquisition will push through nor why Google would want to acquire the company known primarily for having indie music artists and playing host for podcasts.
Speculations point that SoundCloud could compliment Google's other streaming avenues much like Google Play Music and YouTube Red. It is not uncommon for large companies such as Google to have products that do much of the same thing.