NEW YORK (TheStreet) -- For several weeks now, I have been trying to make sense of Twitter CEO Dick Costolo's comments about taking the company public.
He claims he's in no hurry. That he's focused on the business. That, frankly, he really doesn't care much about all of the IPO talk.
In theory, that's an excellent approach. The product comes first. We don't want meddling, no-nothing shareholders telling us what to do. Just look at what happened at
once Steve Jobs entered another dimension. The dividend-craving inmates run the asylum.
Plus, after the
mess and other recent IPO implosions, it makes perfect sense to distance yourself from the notion of going public. That's just not a good club to be part of right now.
That said, Costolo has people to answer to. Venture capitalists. Employees. These folks expect a return on their investments of money and time. There's no better and more efficient way to trigger that return than to open yourself up to the public markets. In fact, it's probably not crazy to say that Twitter
to go public.
Unless, of course, it gets bought out first.
A few weeks back, I would have said we made too much of a story
The Wall Street Journal
The New York Times
appeared to make too much of:
Upon further reflection, however, an outright acquisition actually seems possible. I'm not sure it makes a ton of sense, but I no longer consider it poppycock.
First of all, it explains Costolo's anti-IPO talk. He's incredibly convincing, but he's not stupid. Unless you're
CEO Mark Pincus, there's no better way to sink morale than to make people wait longer than they need to before they can become IPO millionaires.
If Apple swallows Twitter -- and keeps its team intact -- it'll likely swing a sweet deal for all those due a payout via stock options and such.
Second, the integration of Twitter into Apple's new Mac operating system is just incredible. It took me about 45 seconds on my new MacBook Pro to realize this. This relationship not only disses Facebook, it gives Apple traction in one of the few areas it has failed -- social networking. It's way more than a partnership.
Third, I don't buy the arguments that Apple doesn't need to buy Twitter because the integration deal serves it purposes. If we know anything about Apple, we know that it absolutely must have control of every part of every process it's involved in. If that changes in the Tim Cook era, Apple has more post-Steve Jobs problems than I originally thought.
Granted, Apple controls plenty of companies and processes without owning them, but it's much easier to buy Twitter and fully integrate it in your image than it is to gobble up wireless carriers and such.
Fourth -- but closely related to third -- Twitter recently instituted several solid changes to its platform. In a nutshell, it's more personalized; it forges more seamless connections to advertisers, news organizations, etc.; and, simply put, it's slicker and more low-key/intuitive than it's ever been. It's not out of the realm of possibility that Apple is behind this or plays a meaningful role in the direction and decision-making process.
Last but not least, Tim Cook is working hard to put his stamp on Apple. With Twitter wholly synced up to iTunes, the AppStore, Facetime, Messages and other Apple greatness, the company becomes the ultimate social network. That's quite an accomplishment and it has nothing to do with Steve Jobs.
This, without a doubt, would deal a punishing, if not fatal, blow to Facebook. But more importantly, buying Twitter would allow Apple to take the next step in its evolution. It could ensure that the company retains its dominance as it moves through
At the time of publication, the author was long FB
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Rocco Pendola is a private investor with nearly 20 years experience in various forms of media, ranging from radio to print. His work has appeared in academic journals as well as dozens of online and offline publications. He uses his broad experience to help inform his coverage of the stock market, primarily in the technology, Internet and new media spaces. He has taken a long-term approach to investing, focusing on dividend-paying stocks, since he opened his first account as a teenager. Pendola, 37, is based in Santa Monica, Calif., where he lives with his wife and child.