A new report claims that Twitter is in negotiations with Flipboard to acquire the content aggregation service in a deal that could command northward of $1 billion.
Re/code cites "multiple sources" who say that Twitter chief financial officer Anthony Noto has been pushing for the discussions since the start of the year, as the micro-blogging service faces increasing pressure from investors who want Twitter to prove it can maximize its advertising-based business model by increasing user growth and engagement.
If the report is true and an agreement is signed between Twitter and Flipboard, it could cost the former more than $1 billion in an all-stock deal. Last year, Flipboard announced that it had 100 million "activated" users, or users who have used its service at least some of the time, while sources claim Flipboard has around $50 million in revenue. In its most recent funding round, the company's value was raised to $800 million.
However, discussions have allegedly slowed down between the two companies, according to sources. And like Twitter, Flipboard is apparently facing user growth problems of its own, with sources claiming the service's growth has slowed down when Samsung stopped selling devices that come pre-loaded with Flipboard.
It remains unclear what Twitter plans to do with Flipboard's content aggregation service, should it decide to snap up the personalized magazine service, and this has prompted a number of theories to pop up about what a partnership between the two could bring.
One theory is that Twitter is not actually after Flipboard itself, but the news aggregation service Zite, which Flipboard purchased in March from CNN. Zite, a personalized magazine service for iPad, promises to become "smarter" as it learns about its user's news-reading habits. With Zite's technology integrated into Twitter, it could allow the slow-growing network to serve up the news to users, something that rival Facebook is also experimenting with using Instant Articles.
It is also possible that Twitter has something else in mind altogether. A second theory posits that Twitter could be going after Flipboard co-founder Mike McCue himself. McCue, who once served on Twitter's board from 2010 to 2012 before stepping down to establish Flipboard, has a reputation around Silicon Valley as a genius, and having him on the team could easily soothe investors' feathers as CEO Dick Costolo has ruffled them in the last several months.
Until now though, the rumor remains a rumor, and neither Twitter nor Flipboard has spoken up about any plans for an acquisition.
Photo: Johan Larsson | Flickr
