Apple should tweet with its cash cache

A Tumblr blog called “Things Apple Is Worth More Than” details, not surprisingly, an astonishing list: All of the gold at the New York Federal Reserve; the world's entire supply of illegal drugs; the franchise value of “Star Wars”/”Star Trek”/Harry Potter/Stephen King/”Twilight” combined; the entire U.S. aircraft carrier fleet; all 32 euro-zone banks.

All of which is to say, Apple is fantastically valuable. In fact, it sports the biggest market cap of any company in the world. This enormous worth comes from two sources: Its $100 billion cash hoard and its highly valued stock.

Last week, we found out what Apple is going to do with some of that cash: It is going to pay a dividend and buy back stock. But that won't make much of a difference. Apple's revenue and profit are growing so quickly that this $2.65 per quarter (about 1.77 percent) dividend will barely dent its cash pile. (Apple's stock is even more valuable.)

The upcoming $100 billion Facebook IPO made me wonder whether Apple needs to get more creative about some of the new competition coming along. No, I am not suggesting it should buy Facebook. (Mark Zuckerberg's path will not likely run through Cupertino.)

But the dividend/stock buyback started me thinking about all the other things Apple could do. That huge pile of dough and rapidly appreciating currency (AAPL stock) is a powerful combination. It opens up an incredible range of options.

My preference? Use some of that money to make strategic acquisitions that will shore up the few weaknesses Apple has. The pre-emptive strike could also prevent anyone else from making a move that damages Apple's position in its chief markets.

One acquisition stands out to me as a model for what Apple could do: Google's all-stock acquisition of YouTube for $1.65 billion in 2006.

Essentially, it was free. The market rallied Google's stock enough on the news that the acquisition had an effective cost of zero (though it was slightly dilutive to earnings). YouTube became one of the fastest-growing parts of Google, replacing the underperforming Google Video. Monetization of YouTube appears to be increasingly close.

And Apple? Its history is primarily of small, almost tactical purchases. Even its biggest buy, the 1997 purchase of Next Computer that returned the prodigal son Steve Jobs to Apple, was “only” $400 million.

But Apple was a very different company then — a small, niche computer maker, with a visionary at the helm. The Apple of today is a giant consumer electronics firm, selling mobile devices, telephones, tablet computers and, in the near future, televisions. Maintaining mindshare, staying on the cutting edge of consumer tastes, is more important to Apple today than it was 15 years ago.

What is out there for Apple to buy? What is the Apple equivalent of Google Video?

The obvious answer is in social networking, where Apple has not gained any traction. The solution (queue the jeers) is for Apple to scoop up Twitter for $9 billion in cash or stock.

Why Twitter?

Apple does software and hardware very well; it is outstanding at the integration between the two. But it hasn't managed to break the code for social. In fact, Apple may be the only tech company without a Twitter account. Go ahead, check it out.