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Twitter Invests in Headphone Maker Muzik—But Why?

Jan 04, 2016

Twitter faces a number of significant problems as it enters the new year, including the fact that its user growth remains anemic, and its share price reflects those challenges: It has lost more than 30% of its value in just the last three months.

Given that kind of backdrop, it seems more than a little odd to learn that the company's venture-capital arm has invested in Muzik, a startup that makes wireless headphones, according to a report at Re/code.

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Admittedly, these headphones apparently have social-media functions built into them, which allow users to share the songs they are listening to on Twitter (twtr) and other networks such as Facebook. Presumably, Twitter is hoping it can get some traction with music fans by allowing them to share music more easily.

But is this really the kind of thing the company needs to be doing right now? Even if the investment isn't a large one, Twitter seems to have much more compelling needs, such as fixing the problems with its existing product.

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Music has been a tantalizing market for some time now, in part because it is one of the leading topics of discussion on Twitter. But the company has repeatedly failed to make much of it, despite repeated efforts. Its Twitter Music project failed to make much of an impression, despite a rather larger investment of time and money, and hardware is an even tougher game.

Perhaps Twitter is hoping it might be able to cash in when Muzik gets acquired, but the chances of the company signing an Apple-Beats style deal seem astronomical at best.

Plenty of companies have venture-capital arms that invest in other startups, and it's theoretically possible that Twitter could get something out of its Muzik financing. But when you are losing ground as quickly as Twitter is, it's probably a better idea to stay focused on your core product rather than hunting unicorns.

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