A social-media giant that has been wooed by the likes of Yahoo and Microsoft is now looking at an emerging social-networking play. Facebook recently held acquisition talks with micro-blogging phenom Twitter, according to a report in the Financial Times.
The Times cited people familiar with the matter who confirmed that Facebook offered to acquire Twitter in an all-stock deal.
Twitter is a service that lets users stay connected through the exchange of quick, frequent answers to one question: What are you doing? It’s a real-time messaging service that works over multiple networks and devices, including PCs and smartphones. And Facebook would reportedly love to add it to its social-networking services.
Last year, Microsoft offered Facebook $15 billion to become part of Redmond’s growing Web 2.0 assets. Facebook declined, and now it appears that Twitter is offering the same response to its social-networking elder.
The Valuation Question
Despite the rebuff, there is lingering conversation over Twitter’s value. Twitter isn’t reporting any revenue just yet. The two-year-old company is still building its user base, yet this darling of Silicon Valley has reportedly been valued at $500 million.
“There certainly is a natural fit between Facebook and Twitter, but it does seem like the price was the issue,” said Greg Sterling, principal analyst at Sterling Market Intelligence. “Of the recent startups in the past couple of years, Twitter has broken out from the pack in terms of success and adoption. But Twitter hasn’t figured out a good business model.”
Twitter insists it has many opportunities to generate revenue. A statement on its Web site, though, indicates the company is holding off on implementation for now because it wants to focus on building the service and researching the best business model.
“Twitter could certainly do something with its mobile usage in terms of location-based advertising or brand advertising. There are…