Steve Jobs Knew Apple Couldn't Compete in This Sector

There are some areas where Steve Jobs knew he shouldn't take Apple (Nasdaq: AAPL  ) . He knew search was Google's (Nasdaq: GOOG  ) turf, and even though Apple launched iAd for mobile advertising, which competes with Google, that was always primarily for the benefit for developers for app monetization.

Here's another area where Apple has effectively thrown in the towel, even though it dipped its iToes in briefly: social networking. That's Facebook (Nasdaq: FB  ) domain, all the way. On the other hand, Google isn't giving up social networking and Google+ without a fight.

Steve Jobs biographer Walter Isaacson recently discussed Jobs' view of Facebook CEO and co-founder Mark Zuckerberg. Isaacson says he asked Jobs whom he admired in Silicon Valley, and "Mark's was the first name on his lips." That says a lot when we're talking about a CEO that's just 28 years old earning the respect of one of the most influential tech figureheads in the past 40 years, especially since Zuckerberg looked up to Jobs as a mentor in many ways.

Jobs admired how Zuckerberg had an "intuitive feel" for the social network's product direction and what it needed to do next. He also liked Zuckerberg's passion and propensity to cannibalize older offerings, which is one of the most important traits Apple has and one way it has tackled the Innovator's Dilemma. This is why Jobs "felt an odd kinship to Mark," according to Isaacson.

Apple's limited foray into social networking was the flop that is Ping, a social feature integrated directly into iTunes that was intended for sharing music with friends but quietly failed miserably. Ping is walking the plank as we speak, and Apple and Facebook continue to take their relationship to new levels with OS-level integration in both iOS 6 and OS X Mountain Lion. Don't be surprised if Facebook gets a reserved seat in iTunes one of these days soon.

Isaacson says Jobs chose not to regroup Apple's social efforts after Ping failed to impress, because "Mark did it so well." Perhaps more interesting, Zuckerberg might not feel the same way about Apple, as it's rumored to be working on a Facebook Phone, which would put it in direct competition with the iPhone with absolutely no chance to succeed.

Here's some free advice, Zuck. You stick to social networking; let Apple stick to smartphones.

Apple's iPhone would destroy a Facebook Phone mercilessly, which it has a knack for doing to most of its competition. That's why Apple's growth story isn't over quite yet, and you can read all about the iPhone maker's future prospects in our brand-new premium Apple research service. While Facebook still works out the kinks in its advertising business, another social-networking play has its own figured out already. This special free report will tell you about the tech stock you should be buying.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Apple, and Facebook. Motley Fool newsletter services have recommended buying shares of Apple and Google and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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