Twitter Inc (NYSE:TWTR) seems to find a mean to lure news readers to its main social platform as it is planning to acquire Flipboard, an instant news article provider app. Flipboard is known for its magazine-format news content. The deal would be worth more than 1 billion.
Twitter started its Flipboard buyout campaign earlier this year, according to familiar sources. The social giant is seeking new innovations in an attempt to up lift its audience growth. The sources added further that the discussions between the two firms appear to be currently halted after the talks approaching conclusion.
Twitter is interested in Flipboard because of many reasons, one fascinating motive behind its acquisition is its highly skillful team led by Mike McCue, a renowned Silicon Valley veteran. McCue has served Twitter from 2010 to 2012 as its board member and left Twitter because of the increasing competition provided by Twitter to Flipboard, the social service he co-founded with Evan Doll. Due to excellence of McCue as a product genius in Silicon Valley it is apparent that he would be the next CEO of Twitter, replacing current CEO Dick Costolo who is facing increased pressure from investors over the last few months as the company’s graph is continuously falling down.
Flipboard has been not in good shape currently because of growth problems. Last year the firm said it had 100 million “activated” users, of those most people use the service for some time. The firm was worth almost $800 million based on the recent study on its operations. The firm generates almost $50 million in revenue, according to sources of familiar matter.
But the firm lost many valuable users, partly because of the removal of its built-in app in Samsung smartphones. Flipboard find it difficult to attract users in the presence of increasingly challanging environment.
Twitter would be benefited from acquisition as it increases its user base by the addition of valuable Flipboard users. But other buyers including the likes of Google Inc (NASDAQ:GOOGL) and perhaps Facebook Inc (NASDAQ:FB) may join the acquisition race, particularly due to McCue.
