I’ve been waiting on this rumor for awhile, not because I have any knowledge of talks between them, but because it simply felt inevitable. As Valleywag tells it, Apple is in talks to acquire Twitter, talks which writer Owen Thomas describes as “serious.” Such a deal would have Apple paying $700 million in cash for the Web service.
Twitter is the major Web property of the moment, and so rumors about possible acquisitions aren’t a new phenomenon. Apple’s enormous pile of cash makes it a possible acquirer, meaning a rumor about such a deal was almost certain to emerge at one point or another.
I don’t know if this rumor is true, but I’m not prepared to dismiss it out of hand because it makes a great deal of sense.
Where’s the synergy, you ask?
Apple isn’t a particularly strong player on the Web — MobileMe is about the extent of it — and so Twitter would bring, among other things, a strong Web development team with a proven record for building successful products. Twitter founder Evan Williams has already sold one successful Web startup — Blogger.com — to Google.
But the real story is the iPhone. I don’t know if there are any statistics to back this up, but anecdotally I’ve noticed a lot of iPhone users tend also to be Twitter users. The Twitter client Tweetie is as of this morning ranked #32 on the list of top 100 paid iPhone applications. But the connections between the iPhone and Twitter go deeper than that.
Search the app store for the word “Twitter” and you find that not only are there a lot of Twitter clients, ranging from Tweetie to Twitterific to ZipTweet but you also notice that Twitter support is built in to an awful lot of iPhone Apps. USA Today’s iPhone app has Twitter support, for example. “Read It Later Free” does too. Several streaming radio apps let you post a link to what you’re listening to directly to your Twitter feed. “Mobile Fotos,” a photo-sharing app, supports Twitter and integrates nicely with all the major Twitter clients. I didn’t count them all, but there are lots and lot of iPhone applications that mention Twitter in their descriptions, and while some of those mentions are simply “follow us on twitter,” a great deal of them include features that integrate with Twitter in some creative manner. (If anyone knows the number, please say so in the comments.)
Apple might be seeing a trend among its applications developers that isn’t clear from the outside: If iPhone users love Twitter, then apps developers are building Twitter support into their applications. That gives you two arguments in support of an acquisition. Users love it, developers love it. Almost reason enough to bring the entire Twitter ecosystem under Apple’s control, and make it an official part of the iPhone ecosystem.
Whats the third? It’s cheap. Apple has $4.5 billion in cash plus another $20.5 billion in short term investments plus another $4.6 billion in net receivables, which all adds up to a cash hoard that’s just shy of the $30 billion mark. Paying $700 million for Twitter now would be a difficult offer to turn down for the Twitter guys, and it would give Apple control of the what’s arguably the most important Web company going right now, and thus keep it out of the hands of the likes of Google, Microsoft, and Facebook.
So while at first this seems a weird rumor — and I should be clear that I actually don’t think it is true — I’m simply not willing to completely dismiss it out of hand, because it makes a surprising amount of sense. Would Twitter be a good fit inside of Apple? That’s another question entirely.
Here’s a better scenario: Maybe Apple should invest in Twitter.
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