A recent New York Times report says that Apple is taking an interest in acquiring a piece of the social media company, Twitter. But, however the two companies since halted those talks.
According to reports, Apple estimates the value of the up-and-coming social media site to be almost $10 billion.
In a lot of ways, Apple taking a financial interest to Twitter makes complete sense and would be a smart move for the Cupertino-based company. Apple has previously attempted to enter the social media marketing, like Ping for iTunes. Ping is a social media aspect of iTunes, where users can communicate with other iTunes users and share music and applications. Even though the idea sounded good in theory, it was not the success Apple hoped for. But, by investing in Twitter, Apple can increase their understanding of the way social media works.
However, many analysts feel that Apple shouldn't venture into another attempt in social media. A Forbes article commented on Apple's past failures in social media, including Ping, saying, "...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."
Many other competitors, including Google and Microsoft, financial interests in social media websites. Google continues to push it under his social media website, Google plus. In a recent survey, Google+ ranked first in user satisfaction, over websites like Facebook and Twitter. Another competitor, Microsoft, owns a stake in the popular social media website Facebook. Apple previously attempted to partner up with Facebook when they first set up Ping, however, the deal fell through. With major tech companies solidifying their connections with burgeoning social media websites, perhaps it's time for Apple to do the same.
A stronger partnership between Twitter and Apple makes complete sense and can be a win-win for both companies. First and foremost, Twitter is not a perceived threat to Apple in any capacity. On the other hand, Facebook has been rumored to be developing a new mobile phone in a partnership with HTC. While Zuckerberg himself has denied such claims, saying "it doesn't make any sense," for Facebook, rumors persist that the two companies are attempting to release a new phone in 2013. However, Twitter maintains that they are not an Apple competitor. In a recent interview, Twitter CEO Dick Costollo said, "Those guys are a great partner...We think of them as a company that our company looks up to."
Another interesting aspect of the potential Twitter - Apple partnership is the fact that they're both heavily invested in mobile development. Apple has there hugely popular iPhone, which has remained a a cornerstone of Apple's products, even though sales has slowed in recent months. Also, Twitter has continually developed mobile applications for phones including the iPhone, Android phones, and Blackberry. Increasing integration between Twitter and Apple was alluded to in the release of iOS 5, which allows iPhone users to send tweets through almost any application on the iPhone. With both of the companies heavily involved in mobile development, a union between Twitter and Apple can help both companies increase integration with their mobile products and devices.
Lastly, this partnership between Apple and Twitter can help both companies. Apple can use Twitter to further understand and grass the concept of social media, a subject where Apple just doesn't seem to "get it." And for Twitter,can increase their value with a partnership with Apple. With social media stocks like Facebook and Zanga decreasing in value day by day, Twitter can use Apple to increase their value and attract investors. Financially, neither company needs the other. Apple, with their $117 billion cash reserves can easily afford a financial stake in Twitter. Twitter doesn't need apples money either, says the New York Times. " Earlier this year, Dick Costolo, Twitter's chief executive, said the company had "truckloads of money in the bank." The truckloads, according to people familiar with the matter, add up to more than $600 million in cash on hand. This comes from the $1 billion in financing it has raised over the years and, more recently, from a healthy flow of advertising revenue." But, it is evident that there is more to gain in a Twitter-Apple partnership that just money.