Twitter Inc (NYSE: TWTR) recently held unsuccessful talks with audio-based social media app Clubhouse for a buyout with a potential valuation of roughly $4 billion, Bloomberg News reported on Wednesday.
What Happened: The acquisition discussions between the two companies have reportedly stalled following which the invite-only audio-based social media has started exploring the idea to raise fresh financing instead from investors that will value the business at $4 billion.
The San Francisco-based Clubhouse allows app users to host their own online podcast shows. Listeners can tune in to hear interviews or discussions on a range of subjects including health, business, science, space, and also participate in live discussions. It has also started piloting a feature to allow content creators to get paid on the app and plans to soon unveil it to all members.
The buzzy app has secured endorsements and drawn appearances from celebrities across the world of business and entertainment. Tesla Inc (NASDAQ: TSLA) CEO Elon Musk and Facebook Inc’s (NASDAQ: FB) Mark Zuckerburg have featured on the platform.
Why It Matters: The barely year-old startup’s popularity has been on the rise, forcing more established rivals such as Microsoft Corp-owned (NASDAQ: MSFT) LinkedIn, Facebook, Slack Technologies Inc (NYSE: WORK), and Twitter Inc. (NYSE: TWTR) too to try out Clubhouse-like audio features on their platforms.
Twitter CEO Jack Dorsey is bullish on the potential of the social audio-chat feature and is trying out Spaces, currently in beta form and expected to be launched soon. The company is exploring ways to monetize Spaces.
Clubhouse is currently a free-to-use app and it does not run any advertisements. The company may however add a subscription model. It is also exploring options to make the app available on the Android platform.
Price Action: Shares of Twitter closed 2.97% higher at $68.99 on Wednesday and those of Facebook closed higher 2.23% at $313.09.
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