Apple are reportedly in talks with Twitter for a potential sale the social networking site for $700 million. Valleywag, the digital media blog, claims to have contact with an inside source at Apple, who is reporting that a deal is close, and that the acquisition could be completed by 8th June.
Apple is going to bid $700 million in a full cash bid. This is in contrast to Facebook’s $500 million offer last November, which was a hybrid cash and stocks bid. Twitter turned down Facebook, partly because, Twitter’s investors could not agree on whether Facebook’s stocks were worth as much Facebook claimed them to be. When Twitter turned down that deal, co-founder Biz Stone said that the company wanted to be independent and wanted to expand “its messaging service and there would be no disagreement about the value of its stock”. 0
Apple’s interest in Twitter seems to be stemming from its tie-in with the iPhone. Many Twitter applications such as ‘Tweetie’ have been big sellers for Apple. However, the big question is- if this acquisition is successful, then how would Apple make any money? Twitter, with 6 million users and a 1,300% growth yet, has yet to turn a profit.
Apple, however, have reported to having $30 billion in cash, so this is nothing but small change for them. Additionally, internet experts have suggested that this will be more of a statement purchase, than a massive money spinner.We just now have to wait and see how this story develops.