During Monday’s conference call, Steve Jobs got on the line to talk about a lot of things… he bashed competitors and praised the Apple business model but the part we want to focus on is the money. When asked what Apple would do with the $51 billion they’re storing in the bank, Steve said this: “We firmly believe that one or more unique strategic opportunities will present itself to us, and we’ll be in a position to take advantage of it.” Peter Kafka was the first person to — recently — suggest that Apple will buy Facebook and utilize the social network giant’s strengths to bring their brand to the forefront of the technology world.
Of late, Apple has shown great interest in social networking with two new entrants: iTunes Ping and Game Center for iOS. Ping exists so friends can share their music purchasing habits on iTunes with other friends… or so people can follow news from their favorite artists. Game Center exists as the new social gaming platform in iOS 4.1 — scoreboards, challenges, the whole nine yards. Imagine what Facebook integration could do to grow those platforms.
Apple tried to integrate Ping with Facebook but was denied service to the servers after rolling out features without permission to do so. Steve explained that the terms of the agreement were “onerous” but everyone seems to think that some sort of an agreement will happen. Could Apple really buy Facebook? Sure, they’re sitting on $51 billion right now, Facebook is worth about half that. It’s possible and the hints that everyone keeps dropping really makes it seem like a possibility.
The two CEOs, Steve Jobs and Mark Zuckerberg, had dinner together last week. It’s possible that they were only discussing the terms for iTunes Ping Facebook connectivity, but analysts are beginning to think that this could be more than a friendship between the two companies. Apple could seriously compete with Google if they acquired Facebook.
The underlying social networking could be applied to many factors of Apple’s business model. Think about MobileMe… it’s been the redheaded stepchild of Apple products ever since the dot mac days of old. With the right people driving innovation, access to the features without a paid subscription and heavy social integration, it could begin to compete with several of the products Google has on the market. Picasa (someone tell me if anyone actually uses that?): iPhoto, Facebook and MobileMe sharing already provide a better user experience. YouTube: direct publishing from Apple products to Facebook would pull some market share away from the video giant (I’d really prefer just my friends watching my movies anyway). Contacts, calendars, and mail perfectly synced between all of your Apple software and your favorite social network… come on, who wouldn’t want that (with the right privacy settings). :D
Deep integration with the Mac OS and iOS would really threaten the likes of Google and Microsoft. Neither of them has a social network. Google buzz was a pretty big failure and Xbox Live is the only semi-social experience we’ll ever see from Microsoft. If Apple can snatch up Facebook, it will put them several steps ahead of the competition. It seems like an all-around win to us. We doubt that we’ll hear any news of the conversations at tomorrow’s Apple event, but here’s hoping something epic comes from that quiet dinner between our two favorite CEOs.