Why Twitter Turned Down Facebook | Hacker News Reader

Why Twitter Turned Down Facebook

bits.blogs.nytimes.com

29 pointsmakimaki28 comments

To boil it down, a generic answer: "The timing wasn't right."

I still think it was a very prudent decision. Gruber said it best: "I’m not sure I’d sell a sandwich in exchange for Facebook stock." (http://daringfireball.net/linked/2008/11/24/twitter-facebook)

Yeah, but with no business model to speak of, Twitter has yet to prove they are worth as much as a sandwich.

You could say the same thing about Facebook, they're currently losing $50m a year.

But it costs a lot more time and money to create Facebook than it does a sandwich. You could roughly build Twitter in the time that it takes to make a good Ruben or grilled cheese.

You can't build a user base.

Yes, but Facebook could replicate it by putting a link on Facebook to Facetwitter and then hiring both Twitter users who do not have Facebook accounts.

True, but Twitter isn't even trying yet. I think it would be easier to generate revenue with it than Facebook. I'd rather be in Twitter's position than Facebook's.

It's weird, they're both now credible mainstream sources with huge brands.

I was a bit put off on how they spent a whole five minutes on CBC newsworld looking at the buzz in Twitter, and it gets frequent mentions in newspapers.

Another point in Twitter's column is their relatively small staff. How many employees does Facebook have?

I don't know, at least as far as profits go. They've got significant SMS expenses to overcome. Facebook's per user cost of delivering service has to be much cheaper.

I think Facebook has a pretty solid path to revenue (re-legitimize apps and they provide a dead simple payments platform) though they don't seem like they're going to take it.

It's interesting that neither Facebook nor Twitter, which appear to be integral parts of this developing Web 2.0/social network-y thing, are making money or really have any idea how to do so. I wonder how it'll all play out.

Facebook has a couple of hundred million in revenue, as I recall. They're just using it to finance growth. They could be profitable tomorrow just by laying off half the people there.

For those not in the Valley "it wasn’t the right time" == "they didn't offer enough cash".

Which, given the current conditions, means "they didn't offer any cash."

Yeah, I don't think they're in the position to be throwing 9 digits around.

$500 million is a hell of a lot for something like Twitter, even if it is stock, not cash.

But it was $500 mill giving FB a $15B valuation.. If you assume FB is worth $3B - then it was only a $100 mil offer. (Still nothing to be sneezed at)

$3B would be a pretty good value for Facebook given that 2008 revenues were projected at roughly $300m (no idea if they'll hit that). Twitter has raised $20m in funding, so I'd guess, this early on, that their investors wouldn't be super excited about cashing out at $100m in hand-wavey stock values.

$100 million seems like a more fair valuation of Twitter to me. I feel like people around here ("here" meaning Silicon Valley, etc) overvalue Twitter.

$100 million in cash maybe, though that would allegedly be about their valuation as of last funding round.

$100m in Facebook stock I'd turn down too, if I were them.

Why do you think people overvalue Twitter? CNN is starting to embrace it as a news source, and that's huge.

$500 million of a stock you can't sell isn't much if you don't believe in it.

I think in this case twitter has a lot more leverage here. THey have a lot of traction, great reputation (especially after "fixing" their scalability issues) and no competitors (not talking about friendfeed yet). So they can afford to hold out to sweeten the deal a bit more.

I would probably read this in the opposite direction. All of the points you mark in favor of twitter are similarly true for facebook (they have more competition, but are pulling away in most important demographics.) The difference is that facebook can create a twitter competitor themselves and with their chat system have already shown that they know how to handle messaging, while twitter is nowhere close to getting into facebook's turf. The dangerous point about waiting for someone to sweeten an offer is that they probably have some internal "how much would it cost us to do this ourselves and just crush them" numbers to look at as well.

Twitter has a great reputation in small tech circles. My mum is on facebook.

There is still a significant difference in user bases..

On the flipside - our lovely PM has a twitter account: http://twitter.com/KevinRuddPM So perhaps this is changing..

Not so sure about that.

Twitter has about a million users (most of whom seem to be part of the tech crowd). Facebook has 100+ million users.

Facebook's features includes basically all of Twitter's features, and a whole lot more. And Facebook doesn't experience nearly as much downtime, despite having 100x as many users and way more functionality.

I'll just refer to my previous comment about twitter.

http://news.ycombinator.com/item?id=378541

Outside hacker news and "Valley-oriented" news-sites I've hardly heard it mentioned.

Twitter may have potential, but it still has massive usability problems, and at large is one of the few services I've signed up for which has offered me absolutely nothing of value and no way to improve on that.

Saying twitter, a bandwidth hole with no actual plan to monetize on its service, is worth millions is clearly overstating its value, even with its current user-base.

It was mentioned on the front page of The Guardian (national UK newspaper) of Nov 29th, here's the article:

http://www.guardian.co.uk/world/2008/nov/29/mumbai-terror-at...

It is no where near as mainstream as Facebook, but it is starting to be mentioned in mainstream places, not just in the technology sections.

To be honest, I'm not sure Twitter will go mainstream like Facebook has. Most of the value I get from it is to be in touch with friends throughout the day. Not a lot of workplaces will let you do that (mine does, but that's a benefit to being self employed :-) ) From what I see, Facebook is more oriented around much more asynchronous usage, which is a lot easier for most people to use.

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