Or Disney, Yahoo, Adobe, Tivo, Netflix, EA or any of the big names tossed out last week
Source: Asymco
The $51 billion in cash and marketable securities that Apple (AAPL) reported last Monday -- double its holdings two years ago (see chart) -- has been burning a hole ever since in everybody's pocket but Steve Jobs'.
The next day, the business press was full of stories quoting Jobs' answer about why Apple doesn't pay dividends -- "we like to keep our powder dry" for those "one or more very strategic opportunities [that] may come along" -- and suggesting what headline-grabbing purchases he might make with all that money.
The New York Times had a list that included Netflix (NFLX), Electronic Arts (ERTS) and Facebook (privately held). Readers of Barrons' Tech Trader Daily weighed in with Adobe (ADBE), Yahoo (YHOO), Sirius XM (SIRI), TiVo (TIVO), SanDisk (SNDK) and Disney (DIS).
[The latest rumor, which drove shares of Sony (SNE) up nearly 3% in Asian markets Tuesday, is that Apple is thinking about buying the company that invented (but no longer makes) the Walkman. Jobs may have once admired Sony but, as Asymco's Horace Dediu points out, "the company today contains nothing of value to Apple."]
This is all nonsense.
First, by "strategic opportunities," Jobs does not necessarily mean mergers and acquisitions. He might be talking about building something, say another giant server farm like the one set to open in North Carolina.
Second, if he were to buy a company, it would not be Facebook -- a name that came up again over the weekend before Facebook PR felt obliged to shoot down rumors that it was about receive a giant infusion of cash from Apple.
Social network companies that know nothing about building products and have not yet figured out how to monetize what they do have are not the kind of enterprise that Apple buys.
What kind of enterprise does Apple buy? The list below, taken from Wikipedia, is instructive. As the entry succinctly puts it, paraphrasing BusinessWeek's Arik Hesseldahl: "Apple's business philosophy is to acquire small companies that can be easily integrated into existing company projects."
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