Apple acquiring Twitter? Here's why not and what instead

There's nothing better than huge juicy speculation. Usually they're Tweets starting "Google rumored to buy..." but lately, since Apple announced its $100B in cash reserves, the speculation has shifted to Apple.

The latest rumor is that Apple will buy Twittter. This blog article is the best explanation of why people think that this makes sense.

The problem is that if you look closely at the two companies, it doesn't make sense.

Apple exists to make money from devices. Specifically devices for content consumption, but the devices. Store sales, even iTunes, are a minimal percentage of their profits that are there to get people to buy iDevices. I haven't seen a single move they've made that hasn't been around the business model of selling devices. All the acquisitions they've made have been small ones that they hope will give differentiation to their devices.

Twitter exists to be a platform for information and links. They have very little ecosystem (in terms of a site or app that people do things in) or stickiness or advertising potential, since people use 3rd-party apps. Their profit will come from feeds and analysis of tweets. Maybe a bit from advertising from anyone who actually uses their site. But owning it won't give Apple a leg up in driving people to music or to iTunes or whatever, and it certainly won't help them sell devices, since Twitter's raison d'etre is to have everyone use their platform for free.

Want acquisition predictions that make sense? For big ones, try STMicroElectronics (market cap ~$7B, working on cellphone projectors and smartphone chips & sensors). For smaller ones like Apple's traditionally done, try Glopos (indoor location), P2i or HzO (waterproofing), and SoftKinetic or Omek Interactive or EyeSight (gesture recognition).

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