Will Yahoo Or Facebook Be In An Apple Content Keiretsu?

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Includes: AAPL, FB, GOOG, MSFT, YHOO
by: Dana Blankenhorn

Keiretsu was a very popular word back in the 1990s, when Japan's ascendance struck fear into the hearts of American executives.

Wikipedia defines it as "a set of companies with interlocking business relationships and shareholdings," but it is often Americanized to refer to any group of companies that are in the orbit of a larger one. In this way you can say that Microsoft (NASDAQ:MSFT) has a keiretsu around Windows or Apple has one around its iOS.

Most of Apple's (NASDAQ:AAPL) keiretsu relationships around iOS are horizontal. That is, they're tied to supplies and suppliers. Foxconn is an important part of Apple's Keiretsu. So (believe it or not) is Samsung.

But as device take-up continues to build - it's moving three times faster than the Internet did in the 1990s - Apple has an opportunity to make this keiretsu more vertical. And many struggling companies have a large incentive to be part of such a keiretsu, or at least be seen to be part of one.

This is particularly true of software and content companies. Just as you needed to be a good Windows developer to succeed in the 1990s, so being seen as a strong Apple developer will win you money today.

So the tight integration between OSX Mountain Lion, iOS, and Facebook (NASDAQ:FB) deserves closer scrutiny by investors. Lacking a mobile strategy of its own, Facebook is grabbing onto the iPhone as though its very life depends upon it - and maybe it does. With the stock now struggling to hang on to $19/share, half its offering price of May, something resembling a win is essential, and being seen as the premier social network on the iPhone, with the tightest software integration, could do the trick.

Similarly when new Yahoo (NASDAQ:YHOO) CEO Marissa Mayer indicated she wanted all her employees to use iPhones, it was mostly covered as a lifestyle story, or a slap at her former employer, Google (NASDAQ:GOOG). But maybe it's more than that. Making Yahoo applications for the iPhone a default choice for such things as business and sports, where Yahoo still has market-leading content, could give that stock the kick in the pants it needs to get out of its own way.

If you have reached this point in our story, don't leave without thinking of other companies in the areas of content or software you think belong in an Apple keiretsu. Offer them in the comments and let's examine these opportunities together.

(Image from Wikipedia.)

Disclosure: I am long AAPL, YHOO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.