And it looks like no deal is imminent, though the companies would still be smart to figure out some way to work together.
Before Apple launched Ping, its iTunes team was in talks with Facebook for 18 months or more, a source with knowledge of the talks tells us.
While we don’t know the details of their discussions, it makes sense that Apple may have wanted to build Ping as a music-tracking and sales service on top of Facebook’s social graph. This could have allowed Apple to get what it wanted out of the relationship — more iTunes and iPod sales — without having to build a social network from scratch.
But as Steve Jobs noted at the beginning of this month, while Facebook and Apple held talks about various types of partnerships, Facebook insisted on “onerous terms that we could not agree to” (via Kara Swisher). And as we now know, Apple then tried to install Facebook’s public “Connect” log-in interface without a deal with Facebook, and Facebook blocked Apple.
From what we hear, this is the new sound of working with Facebook, which is now big enough — and has such important data — that it knows it’s one of the most important companies in Silicon Valley.
“Working with Facebook as a large company is challenging at this stage, very similar to mid-late-90s Microsoft,” says one Silicon Valley veteran.
That is, it’s still working with symbiotic startups with little friction, but when it comes to working with big companies, it’s increasingly demanding and abrasive. Recently, it has blocked Twitter from incorporating Facebook features into its service, it experienced growing pains in its relationship with FarmVille maker Zynga, and has also blocked Apple.
Besides Apple’s moves into social networking and advertising, which are Facebook’s core businesses, Facebook is also working on mobile phone software, which is one of Apple’s most important businesses. So while Apple and Facebook have a long history — Apple was Facebook’s first big sponsor, via its Apple Students group — the current relationship status is more like “it’s complicated,” to put it in Facebook terms.
There is could still be benefits to both sides to work out some sort of compromise. But as the two companies drift deeper into each others’ core businesses, a big partnership looks less likely.