As per a Friday's report from the New York Times, Apple Inc.(NASDAQ:AAPL) held discussions about the possibility of making investments in Twitter Inc. The company had been talking to Twitter Inc. for more than a year now to make strategic investment in the short messaging service. This investment tactic to the tune of hundreds of millions of dollars and to gain a social networking presence comes as many technology giants were playing catch-up in social media. Apple Inc. which has at one point had mulled an investment that would have valued the microblogging service at $10 billion but the companies were not negotiating now.
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Apple Inc.’s decision to invest in Twitter Inc. impelled an outbreak of activity by some of the established players in the market who suddenly found themselves a step behind a big digital trend. The iPhone maker which has, as of now, never probed into social media dominated by Facebook Inc, would face common rivals such as Google Inc. and Facebook Inc.
The dynamics of the tech-industry have been seen shifting with the ending of the partnership between Google Inc. and Twitter Inc. for featuring Twitter messages in the Google search result and the discussions between Facebook and Apple over meshing the social network into the iPhone's software falling apart. However, last month witnessed the announcement from Apple Inc. to wrap the social network into the iPhone's main software for the first time. Even the discussions between Apple and Twitter didn't immediately result in a deal.
Despite of the rising investor worries about the disconnect between business fundamentals and valuations at hot companies in the broader Silicon Valley market, the Apple-Twitter relationship remains strong even without a strategic investment stake. In fact, word of the talks coincides with people having starting wondering whether expectations for the potential of social media companies had gotten out of hand, and shares of Facebook, Zynga and other companies have wilted. However, people close to Twitter report of ahead 2012 revenue projections that were laid out last year. Twitter is set to gain$259.9 million from its ad business this year, eMarketer Inc. projects.
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Being logical partners in certain ways, Twitter would continue to mesh its short-messaging service into iPhone and iPad and several other Apple products, which are responsible for a big chunk of Twitter use. For its part, Apple has woven Twitter into devices such as the iPhone and, more recently, the Mac computer.
Twitter executives have expressed admiration for Apple and continue to see the company as a natural ally against Facebook and Google.