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Will the Twitter Bird Land on the Apple Tree?

By Renay San Miguel MacNewsWorld ECT News Network
May 5, 2009 12:25 PM PT

Evidence is building that Twitter is the new mainstream cultural darling. There was the Ashton Kutcher/CNN follower smackdown, Oprah shouting from the bandwagon (thanks to her all-caps first tweet), and an episode of ABC's "Brothers and Sisters" wherein Rachel Griffith's character needed venture capital for her startup, but let slip during a meeting with potential investors that "I didn't know what Twitter was."

Will the Twitter Bird Land on the Apple Tree?

Does all this new pop culture street cred, however, add up to a US$700 million price tag for the microblogging company? A Tuesday post on the blog Valleywag mentions that number and cites a source who claims Apple is in serious negotiations to buy Twitter.

Both sides are reportedly hoping to announce a deal by the time Apple's Worldwide Developer Conference begins in June. However, tech reporters, media observers and the blogosphere are wasting little time dissecting a potential deal, trying to find value for Apple in a company that's white-hot with publicity and packs an estimated 22 million users but has so far found no profitable business model.

Valleywag points to an iPhone app mashup, but there are already multitudes of third-party developers providing that service to Apple's App Store. Why buy the Twitter bird when you're already getting the golden eggs for free?

Making Sense of the Rumor du Jour

"Any time you can acquire a technology company that can bring 22 million customers or members, that's not a bad acquisition," Lon Safko, coauthor of The Social Media Bible, told MacNewsWorld.

Twitter is taking its time figuring out a business model because it needs the right strategic partner to help execute that model, accord to Safko, a certified developer for Apple in the 1980s. So why would Apple be that partner?

"When you consider the number of text messages and how that's starting to exceed every other type of message, and when you have a company like Twitter that specializes in and sends more text messages than anybody on the planet, and you've got Apple with the iPhone, which is one of the best senders and receivers of text messages, then you've got to look at the potential," Safko said.

That potential might include Twitter being integrated into a wide variety of iPhone apps, and it would give the company more cause to look into adding photos and videos, a la Twitpic and Seesmic.

The Naysayers' Nits

In the thumbs down column is IDC analyst Danielle Levitas. Her skepticism stems from the different audiences for each company's business model.

"I'm one of those folks who believes Twitter, at least at this point in time, is a much better business marketing tool than a mass market, consumer-oriented social media tool," Levitas told MacNewsWorld. "Apple is much more consumer-facing as a brand, in terms of product offerings, than they are working with enterprises."

Most people looking for updates a la social media are using Facebook, not Twitter, Levitas said. "They're using it to market themselves personally, to market products or businesses. I just don't think it plays to Apple's strength, especially for $700 million. I get that they want to integrate more and more social aspects into everything -- from chat to phone apps to sharing services they allow online. ... I have no doubt integrations of microblogging could make some apps stickier, but I don't know if buying Twitter gives them the right way to get there."

There may be some value gained through the analytical insight that Twitter could offer Apple -- "not just understanding people's behaviors online, but understanding what people are thinking about right away," said David Erickson, director of e-strategy for Tunheim Partners.

"I think that's a big part of the appeal of Twitter in an acquisition," he told MacNewsWorld.

Still, it may not make enough sense to own the Twitter platform for the purpose of enhancing iPhone apps, much less to serve as a way for Apple to get deeper into Web services, argued Erickson. "I don't know why Apple would want it as opposed to Microsoft or Google. It's obvious they're both in the search business -- they're familiar with the business."

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