Apple And Twitter Deal Could Pose Rival to Facebook and Google+

Updated on

Apple Inc. (NASDAQ:AAPL) has not entered into any formal discussion to buy a stake in Twitter in the recent past according to the latest reports. On Friday, last week, it had been reported that the tech giant was in the process of acquiring a stake in Twitter. However, according to NDTV, Apple Inc. is currently not in any formal discussions with the social networking, Twitter, over a possible stake, the report said referring to sources familiar with the matter.

Apple And Twitter Deal Could Pose Rival to Facebook and Google+

The report also notes that late last week, the New York times reported that Apple Inc. (NASDAQ:AAPL) had held negotiations with Twitter with a goal of investing hundreds of millions of dollars in the rapidly, growing social media company, which would have driven the company’s worth to more than $10 billion form the current $8.4 billion. The San Francisco based company has seen its monthly subscribers grow into a whopping 140 million, and it attracts over 400 million short text messages (140 characters), “tweets”, on a daily basis.

The sources are quoted saying, “It is unclear if the two companies talked about a deal in the past and at what level such discussions were held, but there are no current, formal talks between the companies on an investment or acquisition.”

Why Would Apple Opt to Invest in Twitter?

The report leading to this counteracting remark from the unnamed sources indicated that Apple Inc. (NASDAQ:AAPL), which has been very successful in selling electronic devices and softwares, has stumbled in its efforts to get social media and has been in talks with twitter in recent months. The world’s most valuable company lacks traction in social networking, a platform that has become a major engine of activity in the web and mobile devices, notes the report.

Consequently, the overwhelming traffic in social media sites is certainly, controlling how people spend their time and money, and Apple, would want to have a stake in such an industry. According to statistics, nearly 2 billion people use social media in a month. This is approximately 20% of world population, based on 2009 figures. I would bet that the figure represents over 50% of the people with access to modern technology.

Facebook Inc (NASDAQ:FB), the market leader in social networking released its Q2 results with monthly subscribers just shy of the one billion mark, and Google Inc (NASDAQ:GOOG)’s Google+ reported over 250 million subscribers; additionally, there is Pinterest, Foursquare, Tumblr, and Linkedin Corporation (NYSE:LNKD) , all have a good share of subscribers in the industry. Furthermore, with Facebook’s ambitious goal of socially connecting 60% of world’s population by 2015, this could prompt Apple to change its stance toward venturing into social media.

Why Apple May Not Buy Stake in Twitter

Apple inc. has a tradition of acquiring small unnoticeable tech companies, and has never shown interest in buying stake in companies. Additionally, the company has also not delved in investing in social media, but instead considers partnerships. Apple has both its iPhones and iPads integrated with Twitter, Facebook and other social networking mobile applications.

It is unclear whether, the company would ditch its long standing record of full acquisition of small companies to include buying stakes in reputable companies.

Additionally, Apple Inc. and Twitter are noted to have declined to comment on the matter, which further leaves the situation in suspense. We can only wait and see what unfolds in the near future as the tango of the the social media industry hits climax.

Parting Shot

Google Inc (NASDAQ:GOOG)’s Google+ just reached over 250 million users, but it does not seem to be a big success in terms of monetization. Linkedin Corporation (NYSE:LNKD), is the leader in professional social networking, but the company is still trying to make money off of its large network. Even Facebook Inc (NASDAQ:FB) is facing growing competition from mobile users, where less people click on ads. Facebook is trying a whole array of ideas to try and make more money off of its massive user base. With social media showing struggles, why would Apple try to enter?

Leave a Comment