Spotify Technology (NYSE:SPOT) is beefing up its presence in the podcast segment. The company announced that it has agreed to buy podcast advertising and services specialist Megaphone for $235 million.
A privately held company, Megaphone's platform connects podcast hosts and producers with advertisers. It also offers those content creators a number of tools and services to help their voices be heard.
Spotify quoted its chief content and advertising business officer Dawn Ostroff as saying that "We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant."
"We look forward to Megaphone joining Spotify on our mission to accelerate smarter podcast monetization for advertisers and podcast publishers powered by a scaled audience and state-of-the-art technology," she added.
As a privately held business, Megaphone does not publish its financial results. Spotify did not say how owning the company might affect its financial results. It also didn't specify how it would fund the acquisition; as of Sept. 30, Spotify had over 1.18 billion euros ($1.39 billion) in cash and equivalents on its books (the company reports in euros even though it is based in Sweden, a country that is not in the eurozone).
Spotify also did not provide an estimate as to when the acquisition, which is subject to approval from the relevant regulatory authorities, might close.
The company says it is the top audio streaming service in the world, boasting around 320 million users and 144 million subscribers.
Investors might not be fully on board with the Megaphone buy; in trading on Friday, Spotify stock declined by 2%, in contrast to the 1.4% gain of the S&P 500 index.