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5 Things You Didn’t Know About Twitter’s Biggest Acquisitions

The internet has been buzzing ever since news broke that Twitter is considering an acquisition of SoundCloud.

Acquiring an emerging start-up is one thing. But, it’s a completely different beast when purchasing a juggernaut like  SoundCloud. The music streaming and download site reported last July it had 40 million registered users with another 200 million being served. According to TechCrunch, it’s estimated SoundCloud now has 300 million users, which rivals Twitter’s 255 million monthly users.

SoundCloud, founded in 2007 by Eric Wahlforss and Alexander Ljung, has raised $123 million since launching, is now valued at $700 million. This means Twitter will have to shell out a pretty penny for the “YouTube of Music.” While Twitter has purchased 32 start-ups since acquiring Summize in July 2008, this could be the most expensive purchase for the 140-word character service. This is a problem because Twitter is actually losing money on its IPO. Although it has raised $2 billion, some are arguing this money could be spent elsewhere.

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Image Source: Thomas Bonte/Flickr

In the TechCrunch article previously mentioned, Josh Constine makes a valid point on why Twitter should invest in another company besides SoundCloud. For example, Twitter may just not be the best platform for music. Earlier this year Twitter had to shut down its standalone app #Music because it failed to reach listeners. There’s also the possibility of legal ramifications since there is quite a bit of music on SoundCloud that probably isn’t licensed. And, that’s not even discussing how they will need to compete with YouTube or Spotify.

That doesn’t mean that this expensive acquisition couldn’t work. According to Gartner analyst Brian Blau, “A deal like this makes sense for Twitter, [because] it gives them a much needed push into media and adds into their business another really interesting and popular publishing platform.” Blau also added “If SoundCloud can get a favorable music licensing deal to make right how their users get access to published songs, then we could see that music become even more deeply embedded into Twitter apps.” Most importantly, gobbling up SoundCloud means Twitter would gain millions of new users.

If Twitter does purchase SoundCloud, it would join a long list of acquisitions that illustrates Twitter’s desire to become a player in all media outlets, as well as advertising giant.

With that in mind, here is a look back at Twitter’s five biggest acquisitions to date and what you many not have known about the deals.

1. Did Twitter Purchase Vine Because It Lost Out on Instagram?

In October 2012, Twitter took what was considered a gamble when it purchased the 6-second video sharing service Vine for $970 million. Why were people on skeptical on the deal? Because Twitter invested in Vine, along with its three-man team, prior to releasing a public-facing product. Obviously, the risk was well worth it. By June 2013 Vine had 13 million users. By August it skyrocketed to over 40 million. It appears the people at Twitter were right when they called Vine “the next big thing.”

But, one has to wonder. If Facebook didn’t purchase Instagram, would Twitter have acquired Vine?

Jack Dorsey has publicly gone on record to state how badly the groundbreaking deal between Instagram and Facebook stung. He stated to Vanity Fair that “I was heartbroken, since I did not hear from Kevin (Systrom ) at all. We exchanged e-mails once or twice, and I have seen him at parties. But we have not really talked at all since then, and that’s sad.”

Not only was Dorsey a fan of Instagram, he was also a suitor to acquire the photo-sharing platform. Even more awkward is the fact that Instagram founder Kevin Systrom interned at Twitter. Because of these ties, it’s easy to understand why Dorsey was so hurt. However, at least according to Twitter CEO Dick Costolo, the reason for the acquisition was because,”When Facebook bought Instagram, I said we’re not going do what those other guys did. We’re looking for the next thing.”

So far, they’re right.Video will consume two-thirds of the world’s mobile data traffic by 2017. And, a branded Vine is four-times more likely to be seen than a regular branded video.

While the Vine purchase is definitely paying off, it’s hard to imagine a scenario where Twitter would have been able to purchase both Instagram and Vine because it just doesn’t have the funds. Overall, things have worked out pretty well with the Vine acquisition.

2. The MoPub Acquisition Was a Game-Changer

Twitter continued to look for “the next big thing” when it purchased MoPub in September 2013. While not as exciting as a video platform like Vine, the MoPub deal was considered a very big deal. MoPub, at the time, was the largest mobile ad-exchange. What that meant was that MoPub gives advertisers the chance to bid in real time for available online spots.

By acquiring MoPub, Twitter suddenly became the most intriguing brand in the world of advertising. Why? Because Twitter realized that “The two major trends in the ad world right now are the rapid consumer shift toward mobile usage, and the industry shift to programmatic buying. Twitter sits at the intersection of these, and we think by bringing MoPub’s technology and team to Twitter, we can further drive these trends for the benefit of consumers, advertisers, and agencies.”

What that all means is that MoPub has the technology to target users based on browsing history from either a desktop or mobile device. Merging that technology with Twitter’s data can help advertisers more effectively target and identify potential customers. While Twitter’s competitors have realized the importance of this as well, Twitter has established itself as the dominant force in mobile advertising.

3. Crashlytics Remains Independent

When Twitter acquired Crashlytics, the Cambridge-based “mobile bug fighter” in January 2013, it was a unique scenario. With most startups, the plan is to gobble up talent or an appealing piece of technology. Over time, the company acquired is closed down. Crashlytics, however, was never intended to disappear, in fact Twitter had always planned to keep its $100 million or so purchase independent to create a more effective ecosystem.

For example, with all of the influx of rich media appearing on Twitter, it was extremely important to have a company who could identify and resolve any problems. And, it was recently announced that Crashlytics is “working on new beta distribution tool for both iOS and Android that will make mobile app testing easier.” Since Apple recently acquired TestFlight, developers are most likely letting out a huge sigh of relief.

4. Super Bowl XLVII  Verified Bluefin Labs Acquisition

When the lights went out in the Super Dome during Super Bowl XLVII Twitter exploded. Thanks to clever and real-time tweets from brands like Oreo, that nationally televised blackout in New Orleans verified what Twitter had already known; it’s a perfect compliment for television.

Prior to making the large investment for the company who developed software to allow advertisers to monitor and analyze social-media comments surrounding television, Twitter had previously purchased a similar product in Trendrr. Also, Twitter had struck a deal with Nielsen Holdings “to measure the amount of Web discussion generated by TV programs.”

Twitter had already done its homework. People enjoy having a two-screen experience while watching TV – meaning they want to watch a show and discuss or see what others are saying about the show on social media.

When the acquisition for Bluefin Labs was announced on the day following Super Bowl XLVII  it was easy to understand why Twitter made the move. According to Marketing Land, Twitter had captured “26 of 52 national TV commercials — that’s 50 percent of the spots that aired during CBS’ game coverage. Facebook was mentioned in only four of those commercials — about eight percent.”

5. Twitter Outbids UberMedia for TweetDeck

After being founded in 2008 by Iain Dodsworth, TweetDeck quickly became one of the most popular third-party Twitter applications. Users seemed to enjoy how TweetDeck organized the news feeds of Twitter users. So, it wasn’t exactly shocking when Twitter bought TweetDeck for around $50 million back in January 2011. But, what was the main reason for the acquisition?

Ben Parr of Mashable theorized that the purchase was a move to block UberMedia from acquiring TweetDeck. Prior to the purchase there was some bad blood between the two companies. In fact, Twitter banned a few UberMedia owned apps, UberSocial and Twidroyd, for policy violations. Furthermore, there were rumors at the time that UberMedia was attempting to acquire TweetDeck, as well as launching a Twitter competitor. On top of all that, UberMedia owned several other apps that accounted for 11% of all tweets sent. If TweetDeck fell underneath that umbrella, that would have meant that it would have had control over 20% of all tweets sent. And that would have been too much for Twitter to allow. In other words, it was a preventive measure. Which was why Twitter was willing to outbid Bill Gross and UberMedia by $20 million.

What do you think was Twitter’s best investment? And do you think that Twitter should acquire SoundCloud?

 

 5 Things You Didnt Know About Twitters Biggest Acquisitions
Just a typical guy that enjoys an ice-cold beer, pizza, sports and music. Since venturing into the blogosphere many years ago to discuss his favorite tunes, Al has been known to write for online publications by Alpha Brand Media, such as EveryGuyed and Search Engine Journal, to discuss everything and anything that matters.

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3 thoughts on “5 Things You Didn’t Know About Twitter’s Biggest Acquisitions

  1. It’s simply shows that twitter wants to take over more companies which has much number of followers. It’s a marketing funda that if someone beating you in any way then you should have much powerful that you can take over them. Nice post anyway….Didn’t know about all companies of twitter’s acquisitions.

  2. I researched Facebook’s business acquisition history for a piece recently. All the smaller companies which didn’t really make the news – 47 in total since 2005. Twitter has a quieter approach (presumably as they don’t have as much clout and moolah). Interesting article though, thank you!

  3. It’s amazing how underestimated the power of Twitter is. I believe with all the tools it is acquiring that it will take over as the platform of choice for marketers and business owners, if it hasn’t already. Hopefully it doesn’t start to charge you to get your message out to your “followers” like FB has.