Apple Officials Said to Consider Stake in Twitter
Evelyn M. Rusli & Nick Bilton
New York. Apple, which has stumbled in its efforts to get into social media, has talked with Twitter in recent months about making a strategic investment in it, according to people briefed on the matter.
While Apple has been hugely successful in selling phones and tablets, it has little traction in social networking, which has become a major engine of activity on the Web and on mobile devices. Social media are increasingly influencing how people spend their time and money — an important consideration for Apple, which also sells applications, games, music and movies.
Apple has considered an investment in the hundreds of millions of dollars, one that could value Twitter at more than $10 billion, up from an $8.4 billion valuation last year, these people said. They declined to be named because the discussions were private.
There is no guarantee that the two companies, which are not in negotiations at the moment, will come to an agreement.
Apple has not made many friends in social media. Its relationship with Facebook, for example, has been strained since a deal to build Facebook features into Ping, Apple’s music-centric social network, fell apart. Facebook is also aligned with Microsoft, which owns a small stake in it. And Google, an Apple rival in the phone market, has been pushing its own social network, Google Plus.
“Apple doesn’t have to own a social network,” Timothy D. Cook, Apple’s chief executive, said at a recent conference. “But does Apple need to be social? Yes.”
Twitter and Apple have already been working together. Recently, Apple has tightly sewn Twitter features into its software for phones, tablets and computers, while, behind the scenes, Twitter has put more resources into managing its relationship with Apple.
Such a deal would give Apple more access to Twitter’s deep understanding of the social Web, and pave the way for closer Twitter integration into Apple’s products.
Analysts are concerned that Apple may fall behind in mobile software because of increasing competition and a lack of social features. And as Apple has shown, software and content can make or break hardware sales.
“Content was a key pillar in the success of the iPhone,” said Al Hilwa, an analyst at IDC. He noted that consumer loyalty to the iTunes library, which many used to store their music collections, helped lift early sales of the phone. “Down the road, social engagement may dictate how consumers spend,” Hilwa said.
The New York Times