If there’s anything Apple has not been good at, it’s social media. While Google finally seems to have figured out in own place in the social media niche with the highly Google Search-oriented Google+, Apple has struggled to craft its own branded social media experience. Building off of iTunes, Cupertino hoped that Ping could be their answer. But for as popular as Apple’s on-demand music e-commerce platform may be, it has not proven to be well-suited for a social media integration like Ping.
Now, however, it appears as if Apple might forgo an attempt at building its own social networking platform and instead buy a stake in Twitter.
According to the New York Times:
Apple has considered an investment in the hundreds of millions of dollars, one that could value Twitter at more than $10 billion, up from an $8.4 billion valuation last year, these people said. They declined to be named because the discussions were private.
To be sure, it isn’t a lot of money for Apple, which is reported to have $117 billion in liquid assets at its disposal. However, it is a make departure from Apple’s usual model of market development, which usually features an acquisition of a small start-up company that can then be shaped in Apple’s image and likeness, or Apple’s own in-house development of a product and service.
The Times points out that “Twitter and Apple have already been working together. Recently, Apple has tightly sewn Twitter features into its software for phones, tablets and computers, while, behind the scenes, Twitter has put more resources into managing its relationship with Apple.” We’ve also seen with the new iOS 6 build that Apple is moving to further integrate with Facebook as well, after the awkward meltdown of the proposed Apple/Facebook integration with Ping.
Still, it’s difficult to see what Apple — and Twitter’s angle would be in letting Cupertino become a major stakeholder in the Twitter empire. Although Apple is a much larger company, Twitter has also managed to stash plenty of cash away — their war chest is reported to be $600 million. That isn’t all that much when compared to Apple’s stack, but it demonstrates that Twitter is indeed a thriving company. In fact, it still remains more growth-oriented than even Facebook, which has seen a slide in interest, as well as its disastrous public stock offering this year.
Speaking of public stock offerings, Apple’s possible investment into Twitter could have a lot to do with a Twitter IPO, since “Twitter is widely expected to pursue a public offering within the next couple of years, whether or not it agrees to deals with investors like Apple.” For as much as Twitter might have plenty of cash in the bank, they will need to be much further capitalized if they choose to become a public offering, since we have already seen how destructive a poorly-managed IPO can be for even a wealthy company like Facebook. Apple’s stake in Twitter could be about reaping a major windfall in a Twitter IPO.
Further Twitter Integration On iOS?
The Times article also points out that “Apple and Twitter are logical partners in some ways. Unlike Facebook or Google, Twitter has no plans to compete with Apple in the phone business or elsewhere. And as Apple has found, social is just not in its DNA.” It can also be argued that Twitter’s design — complete with its 140-character limit, streamlined user interface, and geolocation — makes it a more mobile, on-the-go social media experience than Facebook. As more and more social media websites pop up, a more definitive division exists between platforms like Twitter and Instagram, which offer users a more immediate, on-demand social media experience, and Facebook and Pinterest, which are more immersive and keep users on their sites.
Apple may see Twitter as an ideal match for the iPhone.
Time will most certainly tell. While we’ll see more Facebook integration on iOS 6, keeping an eye on what Apple does to accommodate Twitter in the near future — and vice versa — will tell us a lot about where this relationship may be headed.
By Michael Nace