Facebook Tries to Buy Twitter, Thinks Status Updates are Very Important

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Facebook recently initiated acquisition talks with Twitter for $500 million in Facebook stock, but those talks fell apart as recently as three weeks ago, Kara Swisher reports.

Execs at Facebook, who have long been impressed with Twitter, were trying to make the purchase at Facebook’s $15 billion stock valuation. At the end of the day, Twitter investors were concerned about the valuation of Facebook’s stock, and weren’t ready to sell out to the first suitor when they believe Twitter has the potential to ride out the economic downturn.

Facebook CEO Mark Zuckerberg recently expressed his high view of Twitter when he said at the Web 2.0 conference that he was “really impressed by what they’ve done” and that Twitter has a “very elegant model.”

In separate interviews, Zuckerberg has commented publicly on how important he believes the “status update” feature is to the future of information sharing on Facebook. Instead of writing a few long blog posts, most people like posting many short status updates, broadcasting everything from their activity to their emotions, he has said several times.

When the Facebook redesign launched a couple months ago, the status update publisher was promoted to the top of the News Feed (home page), reflecting how important what some have called “micro-blogging” is in Facebook’s and Zuckerberg’s eyes.

For its part, Twitter continues to grow while continuing to invest in resolving the technical issues that plagued it earlier this year. Twitter has become an interesting communication platform in its own right, so it would not be surprising to see additional acquirers emerge for whom owning a communication utility might be strategic…