Behind Twitter’s $500 Mil. Rejection of Facebook
Kara Swisher’s Boomtown blog gives us some juicy tidbits as to why Twitter eventually rejected Facebook’s $500 million offer to acquire Twitter. Twitter if you’re unaware is a fast growing “life streamer” that has spawned not only direct competitors, like FriendFeed, but also feature-cloning from the likes of Facebook and Gmail.
Apparently Twitter felt that $500 million in Facebook stock wasn’t necessarily worth $500 million. Twitter investors and execs also felt the timing wasn’t right, and that Twitter still had room to grow and needed time to try to monetize the site to see its full potential. While Twitter has grown 600% in the past year, investors such as Charles River and Union Square Ventures determined that it was still too early in the game to be acquired. Facebook has recently surpassed Myspace, accumulating 120 million users, but so far has yet to be revenue-positive.
The acquisition offer was in all-stock form according to the report, at an earlier buzzed-about $15 billion dollar valuation from Microsoft. Twitter reportedly pegs Facebook at $5 billion, giving their true acquisition payout to be $150 million – too low, even in this current economic climate.
Read more at AllThingsD.com
