All it takes is one person with some time on their hands to start a rumor. Put in a dash each of two hot companies, mention a purchase price, and voilà, a rumor is born. To that end, no, Apple is not buying Twitter for $10 billion dollars.
Eric Jackson’s Forbes article yesterday asserts that Apple needs to buy Twitter. His theory revolves around Facebook buying Instagram for $1 billion, and how an arms race has now been launched between the big tech players when it comes to mobile. If Apple isn’t careful, he says, someone like Google could swoop in and nab Twitter, someone else could buy Yelp and so on, leaving Apple with no big guns for iOS. He even believes that, if Instagram was worth $1 billion, then the value of the Twitter deal would be somewhere around $10 billion.
It has become a favorite pastime for pundits to speculate over what Apple could spend its enormous war chest of nearly $100 billion on, and rumors constantly circulate that the company may acquire this or that, but almost none of them pan out. Last July, Technologizer put together a list of rumored Apple acquisitions dating all the way back to 2003, all of which were in a similar vein as this one, and none of them came true. Anyone remember when it was heavily rumored in 2009 that Steve Jobs would announce the purchase of Twitter at WWDC? It didn’t happen then, and current Apple CEO Tim Cook won’t announcement it now either.
Apple has not gotten to where it is by spending huge amounts of money on a one-trick pony like Twitter. If you look at the company’s track record, the largest purchase was NeXT in 1997 for $404 million, and the purpose of that was to get Steve Jobs back into the fold more than anything else. The next largest was Anobit at the end of last year for $390 million, and that was all about flash memory, something that Apple is using more of by the day. Apple simply doesn’t drop epic sums without extremely good reason. And by managing its money frugally, that is exactly how it has built up this war chest.
We may not know Facebook’s reasoning behind the Instagram deal yet, but there’s no indication that it was a strike against Apple. Instagram had launched an Android app, so it had already left the confines of being iOS-only when the acquisition was finalized, five days later. (Of course, the agreement was likely hammered out prior to that, but there is no way Facebook didn’t know the Android app was coming.)
This isn’t to say that Mr. Jackson is completely incorrect, however. The world he envisions where the biggest iOS apps get bought up by the competition could very well happen, but one shot being fired doesn’t necessarily mean this is war.
Oh, and did anyone bother to ask Twitter if it was even interested in selling?