Twitter Is Not Buying SoundCloud: Source Says 'The Numbers Didn't Add Up'

Twitter Inc. (NYSE: TWTR) has reportedly backed out of talks to acquire SoundCloud, a German-based music-streaming service. The acquisition was rumored on Monday to be Twitter’s largest to date, but the company chose to pass on the deadline for exclusive talks with SoundCloud because “the numbers didn’t add up,” according to an anonymous source quoted by German magazine Der Spiegel.

SoundCloud is a free service that allows users to upload and share audio files, and has become a popular place for DJs and musicians to promote themselves.

With more than 250 million people, SoundCloud’s user base rivals Twitter’s. The company recently raised $60 million in funding.

Twitter and SoundCloud already partnered in 2012 to help users listen and share music without leaving the Twitter platform.

For Twitter, the acquisition would have been about attracting new users. Reports of slowing user growth have plagued Twitter since its initial public offering, and have scared away many investors.

Der Spiegel reported that Twitter was concerned about SoundCloud not having a licensing agreement with music labels to stream copyrighted material. Much of the content on SoundCloud is created by amateur musicians, though major professional acts like Nine Inch Nails and Beyoncé also have debuted music exclusively on SoundCloud.