Why Would Apple Buy a Chunk of Twitter? - Forbes

The NY Times reported last week that Apple is considering taking a significant stake in Twitter. It observed that it might do so because it “has stumbled in its efforts to get into social media.” I found that observation odd. I follow the social media space pretty closely and can recall no effort on Apple’s part to get into social media other than to provide a hosting podcast hosting platform via the Apple iTunes Store.

Further, you have to wonder why the Times thought a traditional hardware maker should try to play in the social network space.

That being said, I think Apple would be wise to take a stake in Twitter and Twitter should welcome the investment, but I see the story as more complex than the view expressed in the Time article.

Earlier this month, I wrote a piece in which I included   Apple, along with Facebook, Google, Amazon and Microsoft as consumer technology’s Gang of Five. Each of these companies aspires to give other Gang members a bit of a run.

The word Gang sounds tough, but I chose the word, because sometimes the game is more about turf than absolute victory.

Take, for example, the 2009 introduction of Microsoft Bing.  Some people dismissed the move as too little and too late to damage arch-rival Google. No one thought Bing could ever eclipse google Search, and that estimation is probably true.

But I don’t think that’s what Microsoft was up to. Bing took in $1.5 billion last year. Where do you think most of that revenue would have landed if there were no Bing? Bing is still growing year-over-year. Each year, it’s thorn gets just slightly sharper in Google’s side. Meanwhile Google has to put it’s attention on other thorns from other Gang of 5 members.

They all do. Apple and Amazon do a lot of business with each other. But iBooks and eBooks are head-to-head rivals as are Kindle Tablets and iPads. Google and Apple were allies for five years, then both went into the smartphone business.

An on it goes.

For the Gang of 5, it doesn’t matter if you started life as an operatig system company, an online bookstore or search tool, a social network or a desktop computer company. It doesn’t matter what your historic core competency once was. Now, you need to compete on all fronts. You don’t need to win on each of them, but you need to play and successfully get some market share.

In my view Apple is in an extremely strong overall position. But it has a weak spot. Not only has it never even tried to be a social media companyâ€"being social, or transparent or remotely conversational does not seem to be part of the company’s DNA. It never has been and perhaps it never will be.

But it needs to be a player in the complex maneuvers and counter maneuvers that comprise the field on which it plays. Taking a stake in Twitter is a smart move if you ask me. It may not add a single gene of social to Apple’s cultureâ€"but it allows itself to play in a very strategic and viable game.