Every time we start hearing about just how much money Apple has in the bank--as of last count, that number is hovering around a pretty flush $29 billion--rumors start fly about what the company will do with its Scrooge McDuck-level cash reserves. Acquisitions always make for a juicy suggestion and current speculation has fallen on two major targets: social-networking site Twitter and video-game company Electronic Arts.
Twitter has become a phenomenon of late, its bite-size messages taking the Internet by storm and possibly even unseating Facebook as the "it" place to be on the Web. While Apple's participation in Twitter is extremely limited, it clearly recognizes the service's impact: for example, the company recently profiled the use of Apple technology at Twitter.
The iPhone, in particular, has helped boost Twitter's popularity--the two seem like a natural fit for each other. But to my mind that's not nearly enough for Apple to go out and purchase the company lock, stock, and blue bird. It's not that Apple couldn't afford Twitter -- $29 billion buys a lot of 140-character messages -- but it is a question of why the company would bother. As Silicon Alley Insider's Dan Frommer points out, nothing about Twitter helps Apple sell more devices, which still remains its core business.
While Twitter has ample funding at present, there's still the long-term question of how exactly the service will generate revenue. Apple's not adverse to employing loss-leaders or breaking even on ventures when it helps move higher-margin products. While Twitter might help convince some people to buy an iPhone -- and even that may be pushing it -- it's not going to help move any more iPhones if it were owned by Apple.
Not to mention that, despite the explosion in social networking of all sorts, Apple has remained the same close-mouthed company that it's long been. It would seem a little silly for the company to buy a Web service and then not eat its own dog food -- and it seems equally improbable that Apple will change its tune and dive head first into tweeting up a storm.
Then there's Electronic Arts. While Apple has struggled with gaming over the years -- some of us, for example, still remember Steve Jobs's presentation of Halo at Macworld Expo 1999 -- the iPhone and iPod touch have made the company a player in the handheld entertainment space. EA is undeniably a big part of that, and the two companies have worked together to bring high-quality titles to the platform. Games remain the top-selling category on the App Store, and Apple's iPod touch ads in particular have focused more and more on gaming.