In what could possibly be one of the oddest matchups in technology history, Apple may be sniffing around a purchase of Twitter.

Rumors have begun circulating, mainly reported by Valleywag, that Apple is in high level negotiations to purchase that darling of the start ups, Twitter.  If the reports turn out to be true, the supposed purchase price is $700 million in cash, and with Apple wanting to complete the purchase before June 8th, 2009 so they could announce the acquisition at the Worldwide Developers Conference (WWDC).

While this is just at the rumor level for now, it does make one start to wonder what in the world Apple would do with Twitter.  First off you have to ask how they came to this valuation.  To date Twitter has made no substantial income, and the only place they have placed traditional ads is on the Japanese version of the site.  While the company has said many times that its believed valuation is $250 million, it has left many people to scratch their heads as to how they reach that astronomical number with no obvious income.

Secondly, you have have to look at the offers they have already passed on.  It is known they passed on a $500 million offer from Facebook, but that deal relied heavily on shares of the social network which has no firm value placed on them.  Twitter’s backers were hesitant and, with good reason, turned down the offer.  There were some reports that Google was trying to purchase Twitter also, but those were flatly denied.  It is also rumored that Twitter’s CEO Evan Williams has said he wouldn’t even sell the company for $1 billion, so what could possibly be drawing them to a $700 million dollar offer from a computer manufacturer?

And that brings us to the third, and potentially biggest, question of what Apple wants with the company.  Apple is, at its core, a computer manufacturer and a software developer, and not a service providing company.  Of their current company offerings, only Mobile Me could be classified as a service, and that is mainly just marketed as an add-on to their already existing customers.  What would Apple do with an extremely popular service that isn’t making money?  Would they try to integrate it into their products?  This has been done with great success by developers using the Twitter API, and if Apple was suddenly turn that off so only officially branded products could be released, the resulting bad PR backlash would not be good for anyone in the way of it.

So you are left to wonder what Apple would get for this rumored $700 million dollars.  Yes, Twitter is an ultra-hot brand right now, but so was MySpace a few years back.  Steve Jobs, CEO of Apple, is not known for just throwing money around without some form of a firm plan as to how he will recoup a profit, so if these rumors are true, he has something up the sleeve of his black turtleneck, and we just don’t know what it is… yet.

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