Facebook, Twitter End Talks on $500M deal

Kara Swisher at AllThingsD reports top executives of Facebook and Twitter recently “ended several weeks of serious talks, in which Facebook was offering to acquire Twitter for $500 million of its stock.” There had been some chatter about a deal, but talks were apparently more serious than was widely known.

The Twitter team apparently decided $500 million wasn’t a rich enough price. Since the company has still not developed a clear plan for making money from its popular microblogging service.

There was also a cost issue for Facebook. If Twitter was offered to Facebook’s 120 million users, Facebook execs estimated that it might have to deal with huge SMS fees–up to $75 million annually.“Facebook has its own revenue-generating challenges,” said one person close to the company. “As much as Twitter would give them a lift in the status area, it was still a worry.”