Imagine if Apple built an ad-serving platform that could compete with Google's AdSense and AdWords, along with a social network and online search engine for PC and mobile. Some speculate the company moves closer to that model each day.
Aside from the battle among mobile phone development platforms for the Nexus One and iPhone, a couple of key developments and acquisitions would put Apple in the ad-serving biz, according to some industry insiders I spoke with Monday at OMMA Performance in San Francisco.
Apple just needs to determine how to build or buy some of the platforms. Acquiring Yahoo could provide the base technology for the pieces it lacks. A chart showing services from Apple, Google, Microsoft and Yahoo published by The New York Times reveals that a Yahoo acquisition would give Apple nearly all the technology it needs to compete with Google in more areas than mobile.
It makes sense because no one company has gone after the "massive amounts of available revenue," one industry source told me. "No one is challenging Google. They control the market. Apple could create another market."
Today, Apple publishes ads, but doesn't have a powerful version of AdSense or AdWords that would put it in a formidable position to compete with Google. Microsoft continues to try and build something advertisers will jump on, but hasn't yet come close.
Apple has launched many products with great success. But some believe its ad-serving platform needs a boost that Panama could add. The ad-serving network would connect through a technology stack comprised of Kenshoo and NetSuite or another content inventory system, which would give Apple the ability to change ads across a network on the fly.
The Times points out that Apple has close to $34 billion in cash and securities, which means it can afford to make some big acquisitions or buy the technology it needs to compete. The missing pieces: online search, social network, maps and news.
Apple reported Monday a profit of $3.38 billion, or $3.67 per share in the December quarter, up from $2.26 billion in the year-ago quarter. Revenue reached $15.68 billion, up from $11.88 billion in the previous year, and better than Wall Street's forecast of between $11.21 and $12.6 billion on earnings of $2.07 per share.
Industry insiders expect Apple to reveal a new tablet device Wednesday, along with other gadgets. The company gave next-quarter earnings guidance of revenue between $11 billion and $11.4 billion, and between $2.06 and $2.18 per share.
Yahoo is scheduled to announce fourth-quarter 2009 results after the close of the stock market on Tuesday. J.P. Morgan analyst Imran Khan wrote in a published note this morning that "headwinds" will impact Yahoo search performance. "We see the search ad clean up and toolbar deals to be headwinds during the quarter." he wrote. "We think the removal of paid inclusion, which ended at the beginning of this year, will be another headwind in 2010."
Khan believes search revenue forecast will decline 15% year on year.