Google will buy Apple by 2011, Part 2

Many of you had some interesting reactions and comments to this prior post. Thanks for your comments. Let me try and explain why I believe this will happen in one form or another in the next 3-4 years. Many of you have stated that Google can’t afford Apple as the market cap is too big for them to swallow today. True. But it’s not today I am talking about. 3 years on the web is like 21 years on the planet (web years and dog years are nearly equivalent). First, as you know things change rapidly on the net faster than anywhere else. Google MAY be able to grab the rest or nearly 100% of the market share in search over the next 3 years – and that share will increase their value (and market cap) tremendously. To do this, they will not need any hardware, nor will they need to introduce any gadgets/phones, what not. Its 100% software driven. And, given that the web will have an increasing percentage of ‘vertical’ search (vs. the Wal-Mart Google engine of today), Google will also begin to focus its sights on those verticals as well with its huge pile of cash. Google will buy their way into any search vertical they might miss. And that doesn’t take into account non-web advertising like billboards, radio, newspapers and traditional TV +. Now, let’s look at Apple. The market for cell phones is in a state of flux. How many iPhones can one buy? Saturation will occur and sales will eventually have to slow. Competition will appear and market share will s-l-o-w down and decrease over time. When Jobs makes the iPhone carrier-neutral, the walls all come down. So, how do you ‘sell’ more cell phones to people that they don’t need? One possibility is to give them away with advertising. Second, while ‘Goople’ may seem far-fetched to us today, lacing cell phones with ads (think Android) AND perhaps computers with ads or instead of buying an office suite from MS, using GoogleDocs with ads instead to help increase market share over the PC doesn’t seem so far-fetched anymore. Would I choose to use a cell service that gave me a free handset combined with no monthly charges in exchange for watching a few ads? Could I and would I use that combination to replace my land-line eventually thereby sneaking this combination right into everyone homes? Would I choose to get a free laptop that does the same type of thing? I might. Would developing countries whose cultures don’t have the money to buy computers and cell communications use such a computer or cell phone? I bet they would.

The same way Apple introduced their new thin laptop without the traditional bells and whistles of all other laptops sounds so much like what Google did when they introduced Search and Adwords, then slowly but surely introduced itself into other traditional media, while their competitors just scramble around to keep up, and can’t so far. And finally, a merger or some combination of the two is not unthinkable. Both company cultures are similar in so many ways. So, think a new form or type of combination or new venture between the two. Maybe not an outright purchase NOW, but its not impossible in the future.

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16 comments on “Google will buy Apple by 2011, Part 2

  1. “Google MAY be able to grab the rest or nearly 100% of the market share in search over the next 3 years”

    That would be a very sad day…

  2. It’s a pie in the sky.
    Apple will instead buy Google or say Google is just not worth it. Apple’s genes are just too strong willed to let another company take over. The shareholders will also be enraged. Apple is an independent company forever. It can, however, take over others. However, Google is not worth it. National interests will limit it – such as the European and Chinese attempts to develop their own search engines. Laws will also limit it – as in privacy laws.

  3. Okay, you’re right. You win. Your specious argument will certainly come to pass. You see, I completely forgot that the iPhone was Apple’s only product.

    I somehow imagined an iPod and a newly-developing OS X Touch handheld computing *platform*. I must have dreamt about a Mac platform that is growing 3x faster than the PC industry year-over-year. I hallucinated Apple being in prime position to dominate our living rooms with the vastly-improved AppleTV. In my visions, I saw a network of brick-and-mortar stores that are *the* most profitable retail operation in the US.

    But you’re right. No way Apple can withstand the mighty power of Google ads. Thanks for showing me the light.

  4. You make an interesting case, but there are some major problems with a Google/Apple mashup. The first being that you’d have to assume that Android would be a failure, otherwise what would be the point to acquire a proprietary platform? I suppose Google could pull a MSFT and start competing directly with it’s own partners, or they could go to the trouble and disentangle the iPhone from it’s apple tree and open it up. But why?
    So far, Google has been about software and services, and they are untested when it comes to hardware. Do shareholders really want to to bet billions that Google will somehow learn hardware super quick and not mess up Apple’s strengths?
    Of course, Google could just acquire Apple and let it still operate somewhat independently; but then where is the value or the point? Apple’s revenue sheet is strong and they have billions in the bank. Acquisition means you are vulnerable, but Apple is hardly vulnerable, instead they seem very focused and able to deliver pretty consistently.
    Apple would have to tank hard before they become a possible target and you’re assuming that core talent would stay at an Apple that has been swallowed whole. I easily see a mass exodus of talent to far greener pastures that what would Google would provide.
    In the end, any company that tries to buy Apple will end up spending billions and won’t even up owning that makes Apple special; it’s talent.
    No buying Apple is like a buying a boat…it seems like a great idea, but you’ll spend way too much and get to enjoy it way too little, and in the end the hull rots anyway.
    Nice writing though.

  5. What rubbish are you talking about the iPhone? Saturation? They’re only selling it in 4 countries. They’ve only been selling it since June. The smartphone segment is growing fast, as it only makes up 11% of the worldwide cell market. The worldwide cell market is over 1 billion units a year. The iPhone is just a drop in this ever-growing bucket. I hardly think saturation will have hit in a few years.

    Second, do you think DOJ or the EU will allow Google to buy Apple?

    Third, if Google is trying to be everything to all mfrs, doesn’t having a hardware mfr conflict? If MS sells a Zune, doesn’t that poison it’s relationship with all of its hardware OEMs?

    Fourth, Google and Apple have a great relationship, already, what added value does it get from buying Apple?

  6. The thing is, Google-this and Google-that aside, Google is a one trick pony. There never has been a shortage of ponies. Apple will continue to create new devices and new revenue streams. In three years Google will be surrounded by competitors who do what they do very well indeed. Instead of gaining 100% market share, Google will be greatly admired for having 25%, just as Apple will be admired for having 25% of the PC market, 50% of the smart phone market, 75% of the hand-held computer market, 60% of the DVR-TV market, and enough cash in the bank to buy god.

  7. Richard is right, Google is a ‘one-trick-pony’… and William, you sound like another in a long conga-line of Google sicophants. Apple is a real company that makes real things. What does Google make? It makes money from ads. People don’t like ads, so Google is on the wrong side of the fence on this one. Google is having its day in the sun, but a study of the conditions for disruption in market’s does not bode well for Google. ~ Plus, I think the final safe-guard against your nightmare scenario is Steve Job’s ego… Thank god for Steve Job’s ego… It drives Apple’s continued success and (i’m sure) would not allow Apple to become another arm of Google’s advertising machine.

  8. While I’d love to see google and apple come together, I don’t think it will happen. They are both wonderfully innovative companies and they could probably make some really cool stuff if they collaborated. But, here’s the thing, Steve Jobs is famously unyielding, stubborn and independent. I don’t think he is interested in having someone at google telling him what to do. I think he would fight a merger in every possible way. However, that doesn’t mean the couldn’t team up to work on some neat stuff. Jobs has shown that he is willing to partner with companies that will give him the freedom he desires, ie the iPhone/AT&T partnership.

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  12. If google already runs Android (a known rival to apple), what would the product release be from the 2? would they be forced to end the rivalry and make a mutual operating system by combining the two or would there still be a rivalry within the same company? hopefully though they will change the outcast, mac.

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