Apple seems to be piling on cash money as fast as Facebook shares are shedding value.
So at what point does Facebook look too attractive for Apple not to make an offer?
The logic is obvious: Apple sucks at building social Web services, as CEO Tim Cook acknowledged earlier this week at the D10 conference.
It needs to keep developers of iPhone and iPad apps happy—appmakers are a key part of the value of Apple's mobile franchise.
Apple also likes to control key technologies, from operating systems to chips and beyond.
Cook made conciliatory noises about working with Facebook at D10. But realistically, the only way Apple and Facebook, both of which zealously guard their power to shape users' experiences, are going to strike a deal is if they're under the same roof.
Oh, and Facebook? It's try-try-again approach to building its own smartphone, as a hedge against Google and Apple shutting it out of their mobile platforms, doesn't seem to be going anywhere, and might just be a plain bad idea.
When Facebook was a private company, Mark Zuckerberg could simply turn down offers. Late Apple cofounder Steve Jobs said he admired Zuckerberg for not wanting to sell out—and on Charlie Rose, Facebook's CEO suggested that Jobs never proposed a deal because he understood Zuckerberg's reluctance to sell.
Oh, sure, Apple would have to offer some premium—maybe Facebook's IPO price. Wouldn't everyone love to see shares back at that level?
Apple has pretty much enough cash to do the deal now—and it will have much more by the end of next year. If it's done with stock, sure, it would be dilutive. But that's an unsophisticated way of thinking about what really would be an investment in the future of Apple's device business.
Need a justification for the deal? There's an app for that.
Forget Facebook trying to make Google-like ad revenues to justify its valuation. Apple could run Facebook like it runs the App Store. It can take a percentage of revenue from Facebook apps while encouraging consumers and advertisors to buy them from developers. That also keeps developers wanting to bring their A game to Facebook and Apple devices.
Meanwhile, Facebook engineers could go to town improving Apple's iCloud Web services, weaving a social layer throughout them.
It could make a little money on the side, sure. That's hardly the point.
"Facebook is the company that is most like Apple," Cook recently told investors.
Finally, there's the personal element. Zuckerberg, of course, has 57 percent of Facebook's voting shares. But that just means he bears the responsibility for whatever decision Facebook makes—and like it or not, he now has a fiduciary duty to Facebook's public shareholders, who may well sue if he turns down an attractive offer.
No need for a deal to be contentious, though. Zuckerberg has, against the odds, become a brilliant leader. He could be crowned Cook's heir apparent—and Jobs's spiritual successor.
No one would grouse about Apple's lack of a "product visionary" if that happened.
If Facebook shares recover from their post-IPO swoon, this scenario's off the table, of course. But if they don't? Zuckerberg has control over Facebook, but his new public shareholders have rights.
If Apple comes through with an offer and Zuckerberg turns it down, just imagine how unhappy they'll be.
