Tech & Biz

Twitter Ignores Facebook's $500 Million Friend Request

by Rob Walker | November 24, 2008 at 12:30 pm

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Facebook poked Twitter, but the growing start up denied their $500 friend request. At least that's what some industry bloggers and writers are saying, quoting high ranking people within both parties as saying that the talks happened and Twitter shut them down.

Of course, it's not $500 in real money, it was $500 worth of Facebook stock. Which many people aren't quite sure exactly how much that is worth, even with Microsoft's huge investment.

There’s an amazing story today reported by Kara Swisher about Twitter rejecting a $500 million acquisition offer from Facebook three weeks ago. Kara refers to some unnamed sources both in Twitter and in Facebook that claim that the talks actually existed - with no one knowing about them through all this time.

Facebook reportedly initiated the talks offering to buy Twitter some time in the middle of October. As part of the proposed deal Twitter was offered Facebook stock worth $500 million and the talks reportedly lasted for a few weeks and ended after Twitter did not agree to the price offered. The thing is that for Twitter it was not easy to agree to a price of $500 million in Facebook stock given all the talks of how overpriced Facebook actually is.

The talks took place over several weeks, and the news broke over at All Things Digital. Rumours of Facebook's interest had started weeks ago at the Web 2.0 summit.

Facebook and Twitter have shuttered "several weeks of serious talks" in which Facebook tried buying the microblogging service for $500 million worth of its own stock.

The news was broken by Kara Swisher of All Things Digital. Rumors of Facebook's interest in Twitter first surfaced at the Web 2.0 Summit several weeks ago.

While the idea was dismissed by speculators at the time, it turns out Twitter and Facebook execs were just wrapping up discussions of a potential buyout. Talks were reportedly initiated by Facebook in mid-October.

So why did the deal collapse? Partially over the price, and as well to give Twitter a chance to build on its growing business. In the end, the timing wasn't right.

The deal apparently collapsed over the price, and a desire by Twitter's management and investors to further build its business and revenues.

"It's more about timing," one person familiar with Twitter's motivations told All Things D. "There is a strong feeling that there is still an opportunity -- even with the economic downturn -- to blow this thing out."