50 Billion Decisions - Only One Steve Jobs - Apple's Mountain of Cash

Apple and Steve Jobs, their (Founder - CEO - and  Savior) have a problem.
However this problem is a great freaking problem to have. Apple sits upon a green mountain that we will call Mount Cash. Apple has right around 40 billion dollars that typically sits on the side lines earning a mire fraction of  1% a year. Jobs main goal with these funds is pure preservation and who can blame him, given the market over the last couple of years.

Economy or no economy the fact is that in another year or so Apple should easily have over 50 billion dollars laying around doing nothing. Steve Jobs and the rest of the folks behind those cash machines known as Mac books and iWhatevers produce more then enough free cash flow to fund any necessary product development or R&D. Free cash flow levels should be around 12 - 16 billion dollars over the next 12 months. Sure every now and then Apple will spend a 300 or 400 million dollars to buy some young interesting company or firm but that just doesn't add up to anything significant when you consider how much these guys keep under the mattress.

What are the Choices for Apple and Steve Jobs?

  • Payout a large chunk and plan a continuous dividend program for their faithful and entitled stock owners.
  •  Start buying back their own stock stock.
  • Invest in a totally new direction and operation. Maybe even a search engine.
  • Start investing for return with such investments in securities like bonds and stocks.
  • Perhaps the best thing to do besides nothing when you don't know what to do is to do a little of everything.

I for one think this is an easy question.

First and foremost I think Jobs needs to pay his share holders. I don't know why companies don't pay their owners... well let me rephrase that i don't know why investors buy stocks that don't pay money when they clearly have more then they know what to do with.

Second and much more of a speculative suggestion, I think Apple should develop some sort of Adsense like publishers program. I think there is plenty of room in both display, and video content advertising in terms of innovation. Also a content targeted program is a proven model as long as you can accurately match supply with the content demanded.

iAd is going to be a great start. Every aspect Apple advertising with iAd and the way they are going about this is insanely clever and intuitive in my opinion.

I really wish I knew what Google was thinking when they found out.

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