Last year, it looked like Facebook was going to snap up Twitter but a $500-million deal suddenly went pear-shaped (Personally, I think it was the best thing that ever happened to Twitter given Facebook would have neutered it.)
According to Facebook investor and venture capitalist Peter Thiel, the deal failed to materialized because Facebook wanted to pay using Facebook stock. Unfortunately, the two sides couldn’t agree on how much Facebook shares were worth.
“It became pretty clear it wasn’t going to happen,” he told BusinessWeek. “The deal would have to be done with Facebook stock. And then you have to figure out how much the stock is worth.”
At one time not so long ago, Facebook was estimated to be worth $15-billion after Microsoft purchased a small stake for $240-million. At the time of the Facebook-Twitter negotiations, Facebook was probably worth $5-billion to $10-billion. And now with global economy in ruins and stock markets eroding, Facebook could easily be worth $1-billion to $2-billion.
Meanwhile, Twitter raised $35-million recently based on a valuation of about $250-million.
Fun and games with numbers, fun and games!
5 Comments
Do you think that Facebook might try again in the future?
Thanks,
Nate
http://www.twitter.com/NateDesmond
Sure, it's a possibility. Clearly, they have a strong interest in Twitter. That said, Twitter has more financial flexibility to wait it out given they just raised $35M.
I think if they had sold out to Facebook they really would have stunted their growth. The foundation of twitter is the open platform and API.
Facebook needs twitter but the buyout would have really limited the potential growth and scope of what twitter could be become.
In the few years they have been in business we have already seen a drastic evolution in the way people use it.
We haven't seen anything yet. I am excited to see how the culture of mass open communication will change the way we look at things.
Facebook just does not seem like the right fit…but I believe strongly that Facebook will continue to face market de-valuation as Twitter ramps. I predict that Google will make a strong move to own Twitter….they have vision, science, and can do the math.
I agree with Lousagar that google is the next inline to snap up Twitter. That goog want they get!