Four Ways Apple Could Spend $80 Billion

With nearly $80 billion in cash, the Mac maker has plenty of spending money. But how should it be used? Around the offices at Benzinga, some have said (perhaps jokingly) that Apple AAPL should attempt to cure cancer to keep Steve Jobs alive. Obviously that's not going to happen. I don't think that even Jobs himself would risk sacrificing his entire company for this endeavor. He loves Apple too much. There are, however, many other ways for the iPhone creator to empty its bank account. 1. Enter the TV Market – The RIGHT Way If Apple is truly determined to own our living rooms, the company might as well put its excess cash to good use and make a TV that looks beautiful, offers unprecedented features (it should be like a giant iPad – minus the touch screen), and retails for a reasonable price. Did you catch that last one, Apple? We know it's not in your character to release a product at a reasonable price. If it was, you wouldn't be able make as much money selling one MacBook Pro as Hewlett-Packard HPQ makes selling seven computers. With nearly $80 billion to burn, Apple can afford to charge less for a new TV. Yes, this would result in a smaller profit margin, and we all know that it's the company's margins that allowed it to post such enormous profits. Still, the TV market is a new beast for Apple. The company could become a leader in this sector, no question. But it can't do it at $2,000 for a 46-inch set (the likely price considering Apple charges $1,000 for a 27-inch computer monitor). No one is going to pay that much for a TV when they can get a 46-inch set from Sony SNE for half that price. 2. Take Control of Facebook Call it a preemptive strike against what looks to be an inevitable takeover from Microsoft MSFT – make no mistake, the Skype invasion is just the beginning – Apple should consider pouring every cent it has into the acquisition of Facebook. At an estimated $70 to $200 billion valuation, Facebook won't come cheap. Apple may not up have enough cash on hand to acquire the social networking giant. But the website is enormous, influential, and has a worldwide presence unlike any other. Imagine the power of having a “Like” button built into every MacBook. Instead of Skype infiltrating Facebook's world, what if it had been FaceTime? In addition to providing Apple with a couple gimmicks that many consumers would eat up, the resulting ad campaign one-liners (“MacBook + Facebook” or “FaceTime, Now on Facebook”) would fit right in with Apple's promo style. While a partnership could have accomplished all of the above, this is nothing more than a dream now that Microsoft has made its move. That is, unless Apple decides to take action – before it's too late. But wait – does Facebook really fit into Apple's business model?: No. But let's not forget that 20 years ago, Apple wouldn't have thought of developing a competitor to the Walkman. Ten years ago, Apple wasn't making smartphones. Three years ago, no one talked about an Apple television set. But here we are. 3. Acquire Hulu or Netflix NFLX Netflix might be feeling the burn of angry customers who vowed to abandon the service when the price increase goes into effect, but the company is still one of the hottest entities in streaming video. Netflix built, branded and revolutionized the idea of through-the-mail DVD rentals. Now it is attempting to do the same with online movie streams, albeit with increased competition. Apple already sells and rents moves via iTunes. Imagine the power the company would have if it could stream them as well. While the Apple may already have plans to implement streaming content in the near future via iCloud, the benefits of owning Netflix go far beyond the firm's ability to stream hit movies and TV series. Netflix already has a ton of streaming licensing deals in place, many of which were acquired at a rate far lower than what a cable provider would pay. These deals, coupled with more than 20 million Netflix users (presumably – we don't know how many will actually drop the service in September), could provide Apple with one of the greatest acquisitions in entertainment history. Similarly, Hulu could give Apple immediate access to a number of impressive opportunities: unprecedented licensing agreements for TV streams, rapidly growing ad revenue, and a small-but-growing number of Hulu Plus subscribers. Hulu has been working hard to beef up its classic movie offerings while simultaneously increasing the number of available shows. During the fall, winter and spring TV seasons, millions of viewers skip primetime in favor of watching Hulu. Google GOOG is particularly impressed, as evidenced by rumors of a buyout and the introduction of YouTube's Cosmic Panda. Great, but should Apple REALLY buy either of these companies?: From a consumer perspective, it might be better if Apple – which is fairly interested in home entertainment – owned Hulu instead of Google. But on the whole, Apple doesn't need either entity. While one or both of these companies could provide the Steve Jobs empire with an easy intro into a very lucrative market, Apple has done a tremendous job of creating and refining iTunes. Why sacrifice all that work by transforming or splitting that business with a streaming entity? Wouldn't it be better to offer a streaming version of iTunes instead? 4. Launch a Full-Fledged Video Game Division Apple is so determined to convince us that our phones don't need buttons that it completely overlooks the fact that video games do – good games, at least. With close to $80 billion at hand, Apple could invest in making or publishing real games made by real developers who could potentially solve this issue (or simply knock some sense in Jobs and convince him that buttons are necessary). Whatever the case, Apple is missing out on billions of dollars in prospective video games sales. The company makes a fortune selling hardware, but earned less than $700 million on software during the third quarter. That's sad, but it shouldn't be too surprising. In addition to killing off Final Cut Pro, Apple is famously known for letting Bungie (the creator of Halo, the multi-billion-dollar franchise Microsoft MSFT now commands) slip through the cracks. While Apple hardware, Mac OS X, and iOS are often praised, the company's software is frequently criticized. By continuing down its current path, Apple won't change that. Maybe Apple doesn't care. But when you consider the billions of dollars poured into the game industry each year, the company is clearly missing out. At the very least, Apple should be making its own successful 99-cent apps and games. What if Apple does not want to compete with an industry stalwart like Nintendo?: Then it doesn't have to. But it could feasibly acquire Bungie or sign a deal with the studio to develop exclusive games for iOS. Bungie has already proven that it has what it takes to produce a series that's large enough to compete with the likes of Mario, Zelda, and Call of Duty. With Apple at its side, I'm willing to bet that Bungie could create another. Alternatively, Apple could stick to what it knows best and produce games strictly for the cheap, 99-cent-loving crowd. By elevating the standards of these interactive applications, Apple could slowly increase their price and eventually convince millions of App Store consumers to accept the idea of paying more for their games. Or, if nothing else, Apple could simply develop its own games to reap every last cent from any future games that sell 100 million downloads. Follow me @LouisBedigian