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My Sunday Washington Post Business Section column is out. This morning, we look at a pretty rad option for Apple and its cash hoard: Buying Twitter.

The print version had the full headline A modest proposal (in more than 140 characters) of what Apple should do with its cash hoard.  (The online version is merely Why Apple should use its cash hoard to buy Twitter).

As noted earlier this week, Apple has gained zero traction in Social, which has become the hottest trend in technology this decade.

Here’s an excerpt from the column:

“One acquisition stands out to me as a model for what Apple could do: Google’s all-stock acquisition of YouTube for $1.65 billion in 2006.

Essentially, it was free. The market rallied Google’s stock enough on the news that the acquisition had an effective cost of zero (though it was slightly dilutive to earnings). YouTube became one of the fastest-growing parts of Google, replacing the underperforming Google Video. Monetization of YouTube appears to be increasingly close.

And Apple? Its history is primarily of small, almost tactical purchases. Even its biggest buy, the 1997 purchase of Next Computer that returned the prodigal son Steve Jobs to Apple, was “only” $400 million.

But Apple was a very different company then — a small, niche computer maker, with a visionary at the helm. The Apple of today is a giant consumer electronics firm, selling mobile devices, telephones, tablet computers and, in the near future, televisions. Maintaining mindshare, staying on the cutting edge of consumer tastes, is more important to Apple today than it was 15 years ago.”

I really like what the Post did in the dead tree version of the paper, the art work is whimsical.
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click for ginormous version of print edition

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Source:
Why Apple should use its cash hoard to buy Twitter
Barry Ritholtz
Washington Post, March 25, 2012
http://www.washingtonpost.com/apples-hoard-and-how-it-should-be-used-think-twitter/2012/03/19/gIQAS7TfVS_story.html

Washington Post, March 25, 2012 page G6 (PDF)

Category: Apprenticed Investor, M&A, Technology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “A Modest Proposal (in More Than 140 Characters)”

  1. I think your link to the online version goes to the 2nd page. Which is a bit confusing since clicking on “pg 2″ still works once you do that. Also, the article actually still works starting just from the 2nd page, albeit with a somewhat abrupt start.

  2. Oops!

    I’ll fix — there is an extra 1 in the URL and that sends you to the 2nd page

    Try this one:
    http://www.washingtonpost.com/apples-hoard-and-how-it-should-be-used-think-twitter/2012/03/19/gIQAS7TfVS_story.html

  3. JimRino says:

    What value has Twitter?

    Apple typically buys something when another company Refuses to offer their servers on the Apple platform.
    Twitter is available to Apple.

  4. JimRino says:

    Apple had the opportunity to compete with Facebook, but they chose not to spend the money.

  5. JimRino says:

    Sorry for the separate entries.
    But, where’s the Revenue in Twitter?
    Are you saying buy it and develop it into a Facebook competitor?
    A dual function product, tweets and home pages to contain user photos and movies?

    Apple has iCloud.
    It’s ditched other products that fit into this niche.

    That’s the one thing I Don’t like about Apple.
    It’s continuous Ditching of good solutions, that it does not develop.
    Especially, Java as a development language.
    It’s email accounts.
    It’s web software.
    It’s lack of long term commitment is troublesome.

  6. newton says:

    I posted this on a previous thread. Maybe more appropriate here.

    http://www.technologyreview.com/computing/39925/?p1=MstRcnt

    Technology Review – Published by MIT

    Review: Bad Apple
    “As the company caters less to the demands of artists and other creative professionals, the quality of its products is slipping.”

    TUESDAY, MARCH 20, 2012 BY SIMSON L. GARFINKEL

  7. AlexM says:

    Apple should buy Twitter just so no one else can. People who denigrate Twitter don’t understand how powerful it is other than the basic “tweet”. You know when revolutions are coordinated through Twitter, congress, and the media use it to get their messages out that even the very serious people have figured out how important a tool Twitter can be.

    The criticisms of Twitter remind me of people’s mindset in 1999 that the internet, texting, and smart phones were just a fad; if you had shown them the future in an iPod or iPad they would have snickered and used their best Luddite vocabulary to trash them.

    The point to be taken from all of the evolving technology is exactly that, technology evolves and the survivors take the technology to the next level.

  8. Ernst Tanaka says:

    Barry — How about AAPL buys a bank and starts Ipay.

    Kill the MA, V and AXP middle man out of the US payment system. That will overall save us from the 5% retail charge the CC’s current have added to the prices.

    Plus it would open the opportunity to pay with a swipe with your phone. Pass the MTA boot just with your phone in your pocket. Pay the toll bridge with a iphone in the car.

    AAPL would save the economy approx 5% over all consumer spending. Of course part of the saving will go to AAPL infrastructure and profits. But as a new participant in the market with a technology advantage they can set price on a fix fee and not to a % of the charge.

    Splitting payment systems from credit provision would another added benefit.

    ET

  9. louis says:

    Can’t we get Apple to do something worthwhile, like a HAMP Program?

  10. Greg0658 says:

    “AAPL would save the economy approx 5% over all consumer spending.”
    NO – not right
    pushing / capturing cash is zero growth .. it is an exchange from an entity to another
    one persons loss anothers gain .. bankster Apple wins / bankster _(pick1+) looses
    no velecity no gain
    think of cash like H2O in the ecosphere .. it rains it puddles it evaporates it floats it condenses it rains
    Recycle It
    ~~
    off that line – I was taken by Twitter users alerting Osama binLaden neighbors to activity on his last minutes .. then other event crescendos to watch the taper like event 3/11/11 … I miss that Real-time feed by Twitter imbed thru Google .. but Twitter isn’t convenient enough .. oh well
    ~~
    human effort is the growth .. we are overbuilt and not enough demand with too many people waiting for demand to return so they can themselves can capture the H2O and survive with it .. sorry kids* your in a heck of a mess .. systems designed by milleniums of time and laws of play in a human ecosphere no one knows how to undo or redo or refab without everything going to chaos
    ~~
    * advice – learn a trade and hope it stays in need – don’t over extend

  11. cognos says:

    Apple is not looking to acquire anything (never done a public acquisition over $1bln).

    Now it is the largest company in the world, soon by far… Not allow to buy anything (heard of anti-trust?).

    This is a benefit… acquiring public tech companies is usually stupid (HP and Palm, GOOG and MotoMob, etc, etc).

    The comment above on payments is interesting. I think this is on the AAPL radar (don’t need to acquire anything). Its also clear media is on the radar. Buying content. There was a good rumor the put a team together to bid on premier league rights in Europe. I think they will begin bidding on NFL, movies, in the US. Cost is deminimus.