Apple Only Has Eyes for Hulu

| About: Apple Inc. (AAPL)

It's getting to the point where it's comical. Apple (NASDAQ:AAPL) has more money than God. Or at least more than the United States of America. And plenty of investors think the company should do something, anything with its money.

On Seeking Alpha alone, contributors think America's Company should choose from the likes of Sprint (NYSE:S), Level 3 Communications (NASDAQ:LVLT), and one dolt even suggested Pandora (NYSE:P). The Sirius XM (NASDAQ:SIRI) to Apple rumors never stop despite the sane argument that Steve Jobs tends not to buy content. Add to this the constant calls for Apple to buy back stock and/or pay a dividend.

Apple keeps a lid on its massive stash of cash because it's Apple. It's not the U.S. government. It's not an emotionally-attached long. And it's certainly not the typical American, known best for lack of impulse control, over-indulgence and smoldering holes in the collective pockets.

The following 2008 quote from Jobs sums it up nicely, relating directly to the reason why Apple does not spend merely because it has lots of money or for the sake of spending:

Apple is a $30 billion company, yet we've got less than 30 major products. I don't know if that's ever been done before. Certainly the great consumer electronics companies of the past had thousands of products. We tend to focus much more. People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully.

I'm actually as proud of many of the things we haven't done as the things we have done. The clearest example was when we were pressured for years to do a PDA, and I realized one day that 90% of the people who use a PDA only take information out of it on the road. They don't put information into it.

Pretty soon cellphones are going to do that, so the PDA market's going to get reduced to a fraction of its current size, and it won't really be sustainable. So we decided not to get into it. If we had gotten into it, we wouldn't have had the resources to do the iPod. We probably wouldn't have seen it coming.

In other words, slow, steady and patient wins the race. Apple longs should laud the company for this approach, not encourage it to spend recklessly on things it does not need.

Other than small, puzzle-piece acquisitions, the only purchase that makes sense for Apple is to buy Hulu. And it looks more and more like it's going to happen.

First, it would have the effect of immediately (as in, within six to 12 months) putting Netflix (NASDAQ:NFLX) out of business. As the above-linked The Wall Street Journal article leads one to imply, Hulu would integrate perfectly with iTunes. Apple would have the choice of pushing a web-based version of a Hulu-integrated iTunes or it could pull a Windows and effectively force computer, tablet and mobile users to download iTunes for access to what would be the ultimate selection in video streaming.

I don't view this as buying content (especially given the initial exclusivity Apple would receive as Hulu's buyer) as much as I view it as buying a platform that makes sense not only vis-a-vis what Apple is today, but what it wants to be tomorrow (read: Apple TV in your living room).

The biggest losers in this whole deal: Netlifx. Call it salt in the wound as Apple kills Netflix at the same time as including it with a new and improved Apple TV. Every other company spending money on streaming content loses here as well, just like almost every other company trying to battle Apple on the gadget front goes down in defeat.

The biggest winner: Yahoo (NASDAQ:YHOO). Why, you ask? Because, clearly, Yahoo would not know what to do with Hulu if it ended up winning the bidding war. Losing out to Apple for Hulu saves Yahoo the trouble of yet another digitial media failure.

Disclosure: I am long S.