Could Apple's Tree House Twitter?

The who's-going-to-buy-Twitter rumor mill began churning Tuesday. This time with the news that Apple has offered Twitter $700 million in cash. Both TechCrunch and Valleywag claim to have access to inside sources at Apple who believe the deal has entered late-stages negotiations.

Speculation is that Apple is interested in Twitter for the tie-in with the iPhone and the numerous third-party applications built to support the messaging service. The company has plenty of cash to make the purchase.

Research firm iSuppli said for the iPhone 3G 8Gbyte version retail-priced at $199, and the estimated $300 subsidy paid by AT&T to Apple for each unit, Apple is selling the product at a price of $499 -- but spending $224.33 to produce each one. This gives Apple a bill of materials, manufacturing and royalty margin of 55% for each 8Gbyte iPhone 3G unit sold.

As for Twitter, Compete estimates that 14 million people visited twitter.com in March, up 76% from February and a whopping 14 times more than March last year. This doesn't include those who rely on software apps like TweetDeck or Seesmic. The site already attracts more people than Ticketmaster, The Wall Street Journal and LinkedIn. The keyword "Twitter" had more search queries than "American Idol" and "IRS" across the top search engines last month, writes Stephen DiMarco in a blog post.

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1 comment about "Could Apple's Tree House Twitter?".
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  1. Daniel Bader from jackpot ventures, May 6, 2009 at 11:25 a.m.

    I can only liken Twitter to the old style telephone 'party line' where the chatter is so cacophonous that you can't understand -nor care to understand- a word anyone is saying, except yourself.

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