Has Apple Finally Found a New Use for Its Cash?

We've been speculating about who might acquire Twitter for years. Now, according to sources quoted by The New York Times, Apple (Nasdaq: AAPL  ) has been talking with the company about a strategic investment.

According to the Times, the Mac maker could commit hundreds of millions at a $10 billion or greater valuation -- about in line with what Google (Nasdaq: GOOG  ) was offering for Twitter just a few years ago, and well above what Facebook (NYSE: FB  ) hoped to pay in the company's more formative years. Hiccups and missteps have since dampened enthusiasm among potential acquirers and IPO bankers.

Interestingly, the news comes just a month after Apple made a deal with Yelp (Nasdaq: YELP  ) to allow its members to check in to popular locations from directly within the Mac maker's new custom-built Maps app. The message? CEO Tim Cook and team are taking steps to make Apple's iOS more social.

Good timing, I'd say. Google has made its Google+ social network a touchpoint for users so that everything users do -- especially Android users -- is trackable for the twin purposes of improving services and advertising efforts. Meanwhile, Facebook is so worried about mobile that speculation over its efforts to produce a smartphone in-house has made headlines. Apple needs the likes of Twitter and Yelp to help users more easily plug into the Social Web.

Yet of all the opportunities afforded by a closer relationship with Twitter, the biggest might be having the network act as a substitute for Facebook Connect as a default login for iOS apps. That way, it would be Apple rather than Facebook collecting valuable data on smartphone usage. Which, in turn, could make the company's thus-far obscure iAd advertising platform a lot more interesting.

Breaking bad rules
Could Twitter help Apple profit from the social-media boom? Is a $10 billion valuation too high a price to pay? We don't yet know the answers to these and related questions, but either way, it pays to study potential disruptions since, over time, the market rewards those that lead the rebellions. We look for just these sorts of leaders in picking stocks in our Motley Fool Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription. If that's not up your alley just yet, make sure to read our new premium reports on Apple and Facebook. Inside you'll receive a full overview of the key opportunities and threats facing both companies, as well as a full year of updates.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple and Google at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Facebook, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Facebook 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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