While Apple has been hugely successful in selling phones and tablets, it has little traction in social networking, which has become a major engine of activity on the Web and on mobile devices. Social media are increasingly influencing how people spend their time and money — an important consideration for Apple, which also sells applications, games, music and movies.
Apple has considered an investment in the hundreds of millions of dollars, one that could value Twitter at more than $10 billion, up from an $8.4 billion valuation last year, these people said. They declined to be named because the discussions were private.
Apple has not made many friends in social media. Its relationship with Facebook, for example, has been strained since a deal to build Facebook features into Ping, Apple's music-centric social network, fell apart. Facebook is also aligned with Microsoft, which owns a small stake in it. And Google, an Apple rival in the phone market, has been pushing its own social network, Google Plus.
Though an investment in Twitter would not be a big financial move for Apple by any stretch — it has $117 billion in liquid investments, and it quietly agreed to buy a mobile security company for $356 million on Friday — it would be one of Mr. Cook's most important strategic decisions as chief executive. And it would be an uncommon arrangement for Apple, which tends to buy small start-ups that are then absorbed into the company.
But such a deal would give Apple more access to Twitter's deep understanding of the social Web, and pave the way for closer Twitter integration into Apple's products. But Twitter does not need Apple's cash. Earlier this year, Dick Costolo, Twitter's chief executive, said the company had "truckloads of money in the bank."
The truckloads, according to people familiar with the matter, add up to more than $600 million in cash on hand. This comes from the $1 billion in financing it has raised over the years and, more recently, from a healthy flow of advertising revenue. Regardless, Twitter is widely expected to pursue a public offering within the next couple of years, whether or not it agrees to deals with investors like Apple.
Apple and Twitter are logical partners in some ways. Unlike Facebook or Google, Twitter has no plans to compete with Apple in the phone business or elsewhere. And as Apple has found, social is just not in its DNA. Spokesmen for both Apple and Twitter said on Friday that their companies did not comment on rumours.
If an investment were to happen, Twitter's chief financial officer, Ali Rowghani, would be instrumental in cementing the deal. Mr. Rowghani joined Twitter in early 2010 after nine years at Pixar Animation Studios, where he worked directly with Steve Jobs, Apple's co-founder.