Apple Mulls Stake In Twitter
Posted by Michael Nace on Saturday Jul 28, 2012 Under Apple News
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
Michael Nace is the Publisher of the iPhone 5 News Blog and iPhone 6 News Blog. He has published articles about the iPhone since 2010.
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July 28th, 2012 at 11:27 am
“Their war chest is estimated to be $600″ It sounds like they need Apple’s money then LOL
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July 28th, 2012 at 1:52 pm
I agree in that twitter is a right choice for Apple. I don’t really use twitter, I just go in every once in a while to keep up with my favorite celebrities….. I use Facebook for social more but I just can’t imagine myself having an IPhone that is fully integrated with Facebook. It would be like those Windows Phone commercials where the person can’t stop looking at the screen. On the iPad, well that’s a while other story. BTW I heard Facebook is partnering up with HTC I believe to make the first ever Facebook smartphone. I don’t know what it’ll do exactly but they say it’ll fully integrate with facebook. HTC did make the HTC Status but the only thing it had was a physical Facebook button. Talk about useless…
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July 28th, 2012 at 2:31 pm
“BTW I heard Facebook is partnering up with HTC I believe to make the first ever Facebook smartphone. I don’t know what it’ll do exactly but they say it’ll fully integrate with facebook. HTC did make the HTC Status but the only thing it had was a physical Facebook button. Talk about useless…”
What I wonder is if this HTC/Facebook smartphone will really take into account anything design-wise from Facebook, or if it is just a chance for branding. It’s like the “Ford Explorer, Eddie Bauer edition.” Whatever.
Apple makes a real smartphone — they design it, and they equip it with their own os. Is Facebook going to do that? I doubt it. We’ve already seen how even Google has struggled to “make its own phone.” It’s one thing to build software, it’s another to build hardware. Fortunately for Apple, they can do both really well.
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July 28th, 2012 at 4:23 pm
I can and cant see Apple buying twitter.
For the I can part- Apple has always loved twitter even well over a year before I even thought about making a twitter. I own a business and I market my services online all the time, but I never looked to twitter until just recently. And even now that I have a twitter, I dont see it as “need” from the business perspective. Twitters more of a personal site just to talk to friends.
For the I cant part- Apple is all about creating innovative tech products and twitter is just a social media network. Nothing innovative or “new.” Facebook already had status updates, and twitter simply limited how long your status can be, and thats all it is. Twitter is only a status update. Or some might argue its more “fun” because of the “trend” feature #LikeThis.
So the main question(s) I have is:
Is Apple willing to spend $10,000,0000,000 so that Apple customers can do what they’re already able to do? Apple will never gain 10 Billion in advertising revenue from using twitter. Apple will only be able to enhance 1 feature of their phone to make it more pleasing. So is this 1 feature worth the 10 Billion?
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July 28th, 2012 at 4:27 pm
Accidentally added 4 zeros in the hundred thousand place ^
Suppose to be $10,000,000,000
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July 28th, 2012 at 10:56 pm
What happened to the dislike indicator? I thought it was a good way to get a sense of how this blog audience felt on a given topic. Any chance of adding that back Mike?
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July 29th, 2012 at 11:06 am
The wall street journal said that these discussions took place over a year ago and Reuters confirms that there are no current discussions. I think this goes to show how the rumor mill produces only part of the truth. I would say that this can be directly related to the new iPhone. There are some truths floating around out there….a new phone will be coming soon, it might have NFC, it might have a smaller connector….but nobody really knows. These features may have been discussed within apple a year ago but may never come to light. Old prototypes (from a year ago) sound like the rumors for the new phone, but I’m just not buying it anymore. I don’t think apple will let everyone down again and release a slightly altered 4/4S design.
Tim cook says they are doubling down on secrecy and I believe that unless something scandalous happens, we won’t get any real truth about what will be on the new iPhone until it is officially announced. In the meanwhile there will be lots of rumors and fake pictures but apple will do everything possible to prevent someone from spoiling the show when they decide to announce it. They have been through all of this several times now so I’m sure they have a good idea of which bases to cover and where to beef up security or whatever.
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September 11th, 2012 at 12:15 am
This only works from iPhone, iPod, iPad and Android devices: Go to the app store and download the app called ‘App trailers’. Once downloaded click on the app and click on the bonus code offer. Redeem bonus code “trailer250″. You will instantly receive the points for this and will be able to redeem them for Amazon, Starbucks, Xbox, Facebook and Playstation giftcards + many more.
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