NYT: Apple negotiated investment in Twitter

PanARMENIAN.Net - Apple, which has stumbled in its efforts to get into social media, has talked with Twitter in recent months about making a strategic investment in it, The New York Times reported citing people familiar to the matter.

Apple has considered an investment in the hundreds of millions of dollars, one that could value Twitter at more than $10 billion, up from an $8.4 billion valuation last year, these people said. They declined to be named because the discussions were private.

Twitter and Apple have already been working together. Recently, Apple has tightly sewn Twitter features into its software for phones, tablets and computers, while, behind the scenes, Twitter has put more resources into managing its relationship with Apple.

Though an investment in Twitter would not be a big financial move for Apple by any stretch - it has $117 billion in liquid investments, and it quietly agreed to buy a mobile security company for $356 million on Friday - it would be one of Mr. Cook’s most important strategic decisions as chief executive. And it would be an uncommon arrangement for Apple, which tends to buy small start-ups that are then absorbed into the company, NYT says.

Twitter has grown quickly, amassing more than 140 million monthly active users who generate a vast stream of short messages about their lives, the news and everything else. An Apple investment would give it the glow of a close relationship with a technology icon, and would instantly bolster its valuation, which, like that of other start-ups, has languished in the wake of Facebook’s lackluster market debut. In fact, word of the talks comes at a time when some are asking whether expectations for the potential of social media companies have gotten out of hand, and shares of Facebook, Zynga and other companies have wilted.

But Twitter does not need Apple’s cash. Earlier this year, Dick Costolo, Twitter’s chief executive, said the company had “truckloads of money in the bank.”

The truckloads, according to people familiar with the matter, add up to more than $600 million in cash on hand. This comes from the $1 billion in financing it has raised over the years and, more recently, from a healthy flow of advertising revenue.

Regardless, Twitter is widely expected to pursue a public offering within the next couple of years, whether or not it agrees to deals with investors like Apple, the report says.