Twitter is trying to buy magazine-style article curation app Flipboard in an all-stock deal that would value the latter company at $US1 billion, according to Re/code’s Kara Swisher.
Re/code’s sources say the deal was pushed by Twitter’s chief financial officer Anthony Noto, but that the discussions “seem to be currently stalled.”
Business Insider contacted both Twitter and Flipboard and we will update this article once we hear back.
It doesn’t seem immediately obvious why Twitter would want to buy Flipboard.
Twitter is suffering an existential problem at the moment: Its monthly active user base is slowing, and investors are concerned. Noto — who recently took on added responsibility for marketing at Twitter — said at a conference earlier this month that the company wants to increase its marketing because although nearly everybody knows what Twitter is, barely anybody knows how to use it or why they would want to.
Flipboard wouldn’t necessarily help solve those problems. The app does not report monthly active users but around a year ago it said it had 100 million “activated users” — the amount of people who have ever used the app. In the universe of apps that drive a lot of user traffic to publishers, Flipboard is a minor player.
However, were Twitter to acquire Flipboard, it probably wouldn’t be adding 100 million new users: Many of the people who have downloaded the app are likely to be the same kind of news junkies that enjoy Twitter and its ability to keep them up to date with what’s going on in the world.
Acquiring Flipboard would be all the more bizarre because it would come mere months after Twitter removed the functionality that was most comparable to Flipboard. The “Discover” tab was the feature that helped users find popular tweets that they might have missed. According to The Verge, the tab had “been stagnant for some time.” It was effectively replaced with a “While You Were Away” selection of tweets that pop up when you open the app.
Perhaps, then, Twitter is looking to Flipboard to help better monetise content that users are directed to from Twitter, but read off the site. Flipboard launched its first ad units in 2011, and has since branched out from just offering full-page interstitials to adding a curated magazine feature and branded content. Flipboard does not report its ad revenue numbers.
It is perceivable Twitter could be looking to Flipboard to launch its own version of Facebook’s Instant Articles, which was unveiled earlier this month. Instant Articles are a way for publishers to post their articles directly to the social network’s iOS app, allowing the articles to load faster for users than their own websites. Publishers can sell their own ads on the articles (and keep 100% of that revenue,) or Facebook can help them sell ads (with 70% of the revenue going to the publisher.)
Facebook also launched its Flipboard competitor, a standalone app called Paper, early last year. But its popularity cratered soon after launch.
Flipboard’s popularity has also fallen since launch, according to App Annie’s all-time download rank history for the iPhone app in the US. Of course, many people who initially downloaded the app might still be using it. But Re/code says Samsung’s decision not to pre-load Flipboard with its smartphones has had a serious negative impact on its user growth.
Flipboard iOS app ranking in the US since launch
Twitter already has a partnership with Flipboard. In February it announced plans to syndicate its promoted tweets to Flipboard as well as Yahoo Japan. It could be that it was then that acquisition discussions were first brought up.
As Re/code points out, it may be that Twitter is interested in Flipboard for its experienced product team, which is headed by co-founder Mike McCue, a high-profile Silicon Valley entrepreneur who has also previously sat on the board.
Flipboard has raised $US160.5 million in venture funding and was valued at $US800 million in its last investment round.
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