Quiet talks between two of the leading social networking systems that would have had Facebook buy Twitter for $500 million have apparently broken down. Kara Swisher, writing on her AllThingsDigital blog, says that Twitter’s investors and executives felt that the company will be able to survive on its own without a Facebook big daddy. Facebook on the other hand, was concerned about Twitter’s burn rate and future revenue potential.
The acquisition talks were first hinted at during the recent Web 2.0 Summit where moderator John Battelle asked Facebook CEO Mark Zuckerberg on stage if his company would be interested in buying Twitter. Zuckerberg replied “We’re really impressed by what they’ve done,” and that they have “a very elegant model.”
An acquisition of Twitter would actually make a lot of sense in our opinion. Users of both services regularly update their status messages and there are a number of plug in’s that allow Twitter messages to be automatically posted to Facebook (and vice versa).
Swisher quotes sources who say that the deal may not be dead forever. “We’d hate to see Twitter go to another company.”
Facebook’s $500 million offer to Twitter was based on the Facebook valuation of $15 billion that came from Microsoft’s investment a year ago.
Facebook has raised $516 million while Twitter has received $20 million. Facebook has 120 million users; Twitter has 6 million (up 600 percent from last year).