CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Internet

Twitter reportedly wants to buy news reader Flipboard

The all-stock deal is valued at $1 billion, says Recode. But why would Twitter want to acquire Flipboard?

Browse through topic panels to see news from every category. Flipboard

Twitter has reportedly been in talks to pick up Flipboard, a service that lets you create your own digital magazine with news stories geared toward your interests.

Driven by Twitter chief financial officer Anthony Noto, the discussions about a potential purchase have been afoot since the start of the year, Recode said on Monday, citing "multiple sources with knowledge of the situation." But at this point, nothing's signed and sealed since the talks appear to have stalled. Assuming a deal ever goes through, Twitter would shell out around $1 billion in stock to acquire Flipboard, according to the sources.

Why is Twitter interested in Flipboard? The microblogging site has been stuck in neutral, and investors aren't happy. In March, the company reported sales and earnings that were lower than expected. Growth in the number of active users has been slow. As a result, Twitter is looking for ways to capture a larger audience by enhancing its own site and offering more beyond its core service.

The acquisition of an online magazine may seem like an odd fit at first. But it's not. Twitter has increasingly become the go-to place for breaking news items. More people are discovering the latest news stories by scanning headlines in their Twitter timelines. So Twitter may be eyeing Flipboard as a way to expand its role as a news service.

A deal between the two companies would add Flipboard co-founder Mike McCue to Twitter's team. Seen as a savvy entrepreneur, McCue also helped kickstart other businesses, such as Paper Software, a company that made software for creating 3D Internet sites and was acquired by Netscape in 1996, and Tellme Networks, a speech recognition maker that Microsoft acquired in 2007. McCue had formerly been a Twitter board member and could even be groomed to take over as Twitter CEO, according to Recode, should current chief Dick Costolo be forced to step down.

Flipboard has its own reasons for a potential acquisition. "People familiar with the company" tell Recode that Flipboard's user growth has flattened off recently. That's partly because the app no longer comes installed with Samsung phones and partly because news readers just don't seem to have the necessary appeal.

Assuming Recode's sources are correct, though, the discussions between the two companies would have to ramp up again if they have indeed stalled.

A Twitter spokesman said the company does not comment on rumor and speculation. A spokeswoman for Flipboard also declined to comment on the speculation around Flipboard and Twitter.