Apple may be interested in acquiring Twitter, the wildly popularly and equally
unprofitable microblogging social networking site.
The "Twittersphere" erupted with speculation the morning of May 5
after Apple Insider reported rumors of the potential acquisition. Neither
Twitter nor Apple responded to requests for comment.
What would Apple gain from acquiring Twitter? A social network of 40 million
members and growing. Apple surprised many industry observers in 2000 when it
bought the fledgling iTunes music service, only to integrate it with the iPod
and create the most popular online music retail business. If Apple is interested
in Twitter, there could be grander plans behind the scenes.
Despite its popularity, Twitter is burning through cash. Twitter has been
operating on venture capital funding since its launch in 2006. While it
continues to add users, it hasn't implemented revenue-generating products.
"Twitter has many appealing opportunities for generating revenue, but
we are holding off on implementation for now because we don't want to distract
ourselves from the more important work at hand, which is to create a compelling
service and great user experience for millions of people around the world.
While our business model is in a research phase, we spend more money than we
make," the company has stated in published blogs.
Twitter users buzzed about the potential Apple acquisition, speculating that
such a deal would lead to a fee-based structure for the microblogging service.
Many IT vendors, analysts and solution providers use Twitter as a means of
communicating with their customers and collaborating on technological opportunities.
A fee-based system, some say, would squelch the collaborative benefits of
Twitter in the technology community.
Twitter reportedly turned down a roughly $250 million acquisition bid by
Facebook. Google has reportedly expressed an interest in Twitter, as well,
presumably to counterbalance Microsoft's significant financial interest in
Facebook.
Channel News and Analysis 
