Apple and Twitter sitting in a tree, K-I-S-S-I... well, you know the rest of that rhyme. There's a fascinating little rumor that recently surfaced on the Internet: Apple is interested in acquiring the hot little social networking/lifecasting tool—Twitter.
According to a well-connected Silicon Valley source who spoke with Gawker, and who may have been recruited by Apple for a senior position, Apple and Twitter's management are engaged in serious negotiations. In fact they may be close to sealing a deal for as much as $700 million, with the intention of announcing the purchase at Apple's World Wide Developers Conference in June.
Twitter, of course, turned down a $500 million offer from Facebook last year, and there was much discussion about another potential buy-out by Google just last month. That last rumor was roundly quashed when Biz Stone himself, Twitter's co-founder, appeared on TV and asserted his company would remain "strong, profitable, and independent."
But would Apple make a better fit for the company? Twitter certainly has an unconventional feel, both in terms of what it's used for, and how it runs as a business—and unconventional is a term more closely connected with Apple than either Google or Facebook. Apple, with a vast cash reserve sitting in a bank somewhere, could also pay cash up front—a sweeter deal for Twitter perhaps in an uncertain economy, and one tempting enough for Stone to change his tune.
But why would Apple be interested? The answer to that may be simple: the Twitter Halo Effect. That's a term more often associated with Apple's own iPod and iPhone business, that have pushed the sales of its computers and apps, and movies and music through the iTunes store. But Twitter, currently an adorable little Internet darling of a company, also has it's own halo effect—though it's only just starting to turn in revenues itself. It's also accessible via smartphones, and there are a huge number of iPhone Twitter interfaces, so bringing the service into Apple would enable a tighter fit to the iPhone, and maybe even allow Apple to innovate Twitter using its nascent MobileMe cloud service.
Perhaps the other interesting angle is Twitter's new live search function—though the news about it hasn't quite spread yet, it's actually an incredibly potent tool that turns Twitter into an up-to-the-second live news source that in some ways rivals Google. Apple itself has close ties with Google, even at management board level, and integrates its services into OS X and the iPhone—but the folks at Cupertino would surely love to have access to their own dynamic crowd-sourced search engine: it's ripe for innovative exploitation.
Of course, this is just another rumor, albeit an intriguing one, and we won't know for sure until someone official issues a round denial or a confirmation. There's not much time though: WWDC is in a month.