Poor Facebook. They can’t seem to do much right over the last few years in spite of their amazing growth. Like for example, Facebook finally fesses up and admits they DID try and buy rival Twitter — after continually denying it. Here’s the story from PCMAG.com…
Facebook Did Try and Buy Twitter
Speaking with BusinessWeek, Facebookexecutive, Peter Thiel confirmed what we had figured all along: his company tried and failed to buy microblogging site Twitter, last year. “It became pretty clear it wasn’t going to happen,” he told the magazine. “The deal would have to be done with Facebook stock. And then you have to figure out how much the stock is worth.”
Why did Facebook have such a hard trying to acquire Twitter? Legal issues and unresolved accuracy on just how much a company like Facebook is worth have much to do with it. Caroline McCarthy, a CNET News staff writer said:
Controversy over the true value of the privately owned company also came into play earlier last year when the settlement of the ConnectU vs. Facebook lawsuitwas being negotiated. Court documents were redacted to keep the true valuation under wraps, and media outlets, including CNET News, petitioned to have the documents made public. The founders of small social-network ConnectU, who had sued Facebook because they claimed founder Mark Zuckerberg stole their code and business plan, contested the original settlement when they said they had been misled as to Facebook’s true valuation.
http://news.cnet.com/8301-17939_109-10185022-2.html
I love Twitter but how are they coming up with that number? The old rule of thumb on the Internet is that any one subscriber is worth $1/month for the service. Twitter has, I believe, about five million users. So that’s $5 million/month, or $60 million/year.
Moreover, Twitter is very much a platform where the real value is in the users. Twitter works and is working because the average user on the service is intelligent, well-read and has something to say (and share). Being absolutely frank, if the network suddenly booms to a 100 million users (i.e., Facebook-levels) a lot of these newcomers are going to be slightly less impressive (i.e., MySpacers). This by default will make the overall value drop. End result: a lot more eyes on a exponentially decreasing prize. We’re already seeing this to some extent with the dumbing-down of the current celebrity blitz on there.
I tend to agree with @Sheamus ‘ point…my concern is just what would massive success for Twitter do to the user base. Frankly one MySpace is enough. You know we’re in trouble with Twitter when they start allowing bright neon type flash, and walls for others to post blingy images on your profile page.
