July 29, 2012
Apple Considered Investing In Twitter
redOrbit Staff & Wire Reports - Your Universe Online
Apple officials reportedly met with Twitter representatives a little over a year ago to discuss a possible strategic investment in the microblogging website, the New York Times and other media outlets reported over the weekend.
The two parties are not currently in negotiations and it is uncertain whether or not they will ever reach an agreement, but sources familiar with the matter told Times reporters Evelyn M. Rusli and Nick Bilton that the Cupertino, California-based Mac, iPhone and iPad developer had considered investing "hundreds of millions of dollars" in the social network -- an investment that could have placed Twitter's value at over $10 billion.
While such an investment "would not be a big financial move for Apple," which has a reported $117 billion in liquid investments, Rusli and Bilton said that it would be one of CEO Timothy D. Cook's "most important strategic decisions as chief executive" -- not to mention "an uncommon arrangement for Apple, which tends to buy small start-ups that are then absorbed into the company."
However, as USA Today's Yamiche Alcindor pointed out on Saturday, a partnership between the two companies could help Apple better understand the inner-workings of social media, as well as led to enhanced Twitter integration into some of their products.
Both of those would be definite positives for the 30-plus-year old technology giant. But, warns Forbes contributor Erika Morphy, "But let´s hope it ends there and Apple doesn´t begin to fancy itself a possible venue for a social network. For the most part, Apple has flubbed its major social media efforts and shows little other sign that social networking is in the company´s DNA."
Meanwhile, Matt Marshall of VentureBeat is skeptical that Apple would actually invest in Twitter. He argues that the negotiations took place "at the height of frustration for the company--perhaps even panic," occurring shortly after the launch of Google+ and during a time when Apple's relationship with Facebook was tenuous.
Since then, however, he says that "things have calmed down markedly," especially in light of an improved relationship with Facebook that includes integration into the latest version of Apple's mobile operating system, iOS 6. "The stress of the Facebook threat, and the need to scramble for an extremely tight relationship with Twitter, had fallen away," Marshall said, "And with Apple´s history of extreme focus, and Twitter´s progress over the past year at monetizing its network, any investment by Apple in the future Twitter simply begins to look unlikely."
According to the Wall Street Journal, sources close to Twitter have said that the company is outperforming their revenue projections for 2012, and was most recently valued at $8.4 million as it readies for a possible initial public offering in 2013 or soon thereafter.