Facebook Decides Not to Buy Twitter, Doesn’t Tell Anyone

AllThingsD is reporting that about three weeks ago, while no one was looking, Facebook and Twitter ended several weeks of serious talks, in which Facebook was offering to buy the popular service outright for $500 million of its stock, according to sources on both sides.

The report said that the talks broke down in part over Facebook’s valuation; in other words, was $500 million of Facebook “stock” really worth that much, given that the company hasn’t gone public yet. “But, more important [sic], it seems, was a feeling among Twitter investors and execs that the start-up should still take a shot at building its revenues—there are none right now—as well as it had done at building its growth.”

“It’s more about timing,” said one person close to the negotiations in the article. “There is a strong feeling that there is still an opportunity—even with the economic downturn—to blow this thing out.” It’s a natural fit for the two companies, given how many users already use various Twitter-related plug-ins on Facebook, though the SMS fees alone could be tough for Facebook to take on, according to the report.