Why Facebook couldn’t munch Twitter

Guy Kawasaki loves it, Facebook wants it, but Twitter won’t sell to the social networking service, at least not right now.

We reported on Facebook’s failed $500 million all-stock deal for Twitter last month, and now it seems money and monetization stood in the way of the deal.

Discussing the failed deal, Twitter CEO and co-founder Evan Williams this week told the New York Times, “We explored it, as we should. We took it seriously. It definitely made sense – the strategy we talked about with them – but it wasn’t the right time.”

His firm instead decided to attempt to establish a monetisation model for the service, “Maybe we’ll see each other in the marketplace,” he said.

Another reason of course is the $500 million bid. Because the bid was made in Facebook stock alone, Twitter management had to consider the actual value of the cash on the table, which GigaOm sees as just $150 million. Facebook’s value has been skewed by Microsoft’s 2007 investment of $240 million in the service.

So there you have it: Not enough cash on the table, insufficient monetisation plans. And that’s why Facebook couldn’t munch Twitter.

Via: MocoNews.

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