Twitter might be planning to acquire news aggregation service Flipboard for $1 billion (£630 million) in an all stock deal. It comes a few weeks after Twitter’s stock price plummeted, after low earnings and expectations were reported.
Wall Street is worried Twitter will never reach the levels of Facebook, Google and other Internet companies, due to the lack of growth in user base and the low level of advertising on the platform compared to its competition.
Flipboard would be a good cover for Twitter, adding a talented team of developers, 100 million new users and experimental video adverts. That said, Flipboard seems to be in the same user rut that Twitter has found itself in, with a third of the customers.
For the past year, Flipboard has been figuring out how to fix its user issues. Some in Silicon Valley see the news aggregation service never taking off in the same way apps like Instagram, WhatsApp and Facebook.
Due to the amount of information on Flipboard, a lot of people seem uninterested in keeping active on the platform. Twitter already integrates with Flipboard, and has already shown an interest in current news and aggregation.
The deal is currently stalled, meaning Twitter might have to wait a few months before announcing. Flipboard recently held another funding round valued at $800 million (£520 million), making the $1 billion (£630 million) offer higher than the current valuation.
Twitter has almost no savings however, making it almost impossible to acquire companies without paying in stock. The performance of Twitter’s stock over the year might make Flipboard wary of the long term value—especially if it has other potential buyers.