Facebook made a recent overture to purchase Twitter for a reported $500 million, according to Kara Swisher in her BoomTown blog. The offer was a stock transaction and beyond the usual question of price was the concern about whether the shares being offered were actually worth that much.
Swisher explains: “The Twitter side felt that figure was inflated and the shares should
be valued at the lower figures that have also been reported for
Facebook’s true valuation, more in the $5 billion range. That would have given the deal a $150 million price tag, which was
seen as too low, especially since it was in Facebook stock and not cash.” This theme has dominated much of the online discussion today.
Chris Brogan, a prominent social media evangelist with more than 21,000 followers on Twitter, said the deal might be successful if Facebook were simply looking for an investment. But in the more likely case where a merger would occur, he was very bearish on the outcome.
“Twitter is an already hot ecosystem. It doesn’t need integration with the new Borg to make it better. In fact, that would likely kill it,” Brogan told Media Bullseye. “This isn’t the same as AIM buying MSN Messenger or similar. It’s not even ICQ sucked into AIM. It’s like your telephone being sucked into the home entertainment center. It’s that different, the mode in which we use it,” he explained.
Laura Fitton of Pistachio Consulting agreed that integrating Facebook and Twitter would not be a good idea. She also said that the “pie in the sky” valuation of Facebook stock does not make sense in the current economic climate.
But it is the corporate culture of Facebook that concerns Fitton most. In an interview with Media Bullseye, she said that Facebook’s attempts at monetization thus far have been “ham-handed” and they haven’t proven they can live up to the “do no evil” mantra popularized by Google and carried out, in her view, by Twitter. She described Facebook’s Beacon project as one that could have been very powerful if handled properly, but she felt that the popular startup did not execute it well.
Others suggested selling Twitter wasn’t a bad idea, just not to Facebook. “Goodness sakes, Google. Buy Twitter already. It’s exactly what you need, & if you don’t, something silly will happen, like Facebook,” opined David Nielsen.
Entrepreneur Kevin O’Keefe made a different suggestion after noting he was pleased the talks are off. “I like well funded Twitter with LinkedIn running a Twitter API,” he posted.
Brogan may have summed up the overall community reaction, however, when he told me, “I hope smarter product management minds prevail.”