Washington Post: Apple Should Use its Cash to Buy Twitter

Last week, Apple revealed its plans to offer a stock dividend as a way of spending some of its enormous $100 billion cash balance. Nevertheless, Barry Ritholtz at The Washington Post believes that these plans will hardly put a dent into the iPhone maker’s cash sum due to the company’s rapidly growing revenues and profits. With so much cash remaining, Ritholtz believes that Apple should consider making some acquisitions to bolster some of its weaknesses and fend off its current and future competition. And Ritholtz’s shortlist of acquisitions that Apple should make includes Twitter…

Ritholtz does note that most acquisitions are overrated and ultimately result in failure. The merger of AOL and Time Warner in 2000, for instance, was unsuccessful and resulted in Time Warner withdrawing from its stake in the company at a tremendous loss. On the other hand, there have been a number of acquisitions that have worked out positively for both sides. Oracle has acquired a number of smaller companies to boost its portfolio, while the acquisition of YouTube by Google for $1.65 billion in stock in 2006 is a notable example.

Essentially, Ritholtz believes that Apple should make their own acquisition of this nature. If the Cupertino-based company acquired Twitter, it would be able to establish its name in the social networking industry. The closest that Apple has come to its own social platform is Ping, which is its iTunes sharing feature that has hardly gained any traction and is often looked at as a failure. Facebook is set to grow even larger with its public stock offering, while other emerging social networks such as Path and Pinterest are just on the horizon. Now is the time for Apple to make a game-changing acquisition, be it Twitter or another company.

[The Washington Post]

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