Following the session, attendees poured into the hallways dissecting the dialogue to support or discount the prospect of such a bold acquisition.
For the record, I had heard the rumors and was pretty confident that the discussions were taking place. What I couldn't fathom was how Facebook would leverage Twitter's unique model and culture as its community is radically more liberal and protective than that of Facebook. And, with looming, it seems that Twitter, which is already appearing as an opt-in service in the Facebook News Feed, is only one of the many distributed communities that can collectively position Facebook as your central for managing the relationships that define your social graph and the information, content, and insight that defines, strengthens, and elevates it.
For those who aren't yet familiar with Facebook Connect, it is a technical bridge that links your Facebook profile with other online identities and associated activity back to Facebook. It enables seamless integration between Web sites, pages, communities, and networks and the Facebook identity system. For example, if you’re commenting on a blog hosted on the Moveable Type platform, you can now login with your Facebook details and not only will your comment and link to your Facebook profile appear on the blog, the activity of commenting is also linked back into your activity feed for your friends and colleagues to see. Digg will also allow Diggers to log on using their centralized Facebook ID and for each story they digg, the activity is documented back on their profile. Facebook Connect partners already number in the hundreds.
The deal was close to finalization, but (thankfully) fell apart for very valid reasons.
Just for the record, Twitter's investments total ~$20 million with a valuation of $98 million.
From Facebook's perspective, the stock offer was a conservative approach that reflects the business state of Twitter. The company is not only generating $0 revenue, but its basically a substantial cost centert. Among salaries and other expenses with innovating and managing the service, Twitter pays for SMS fees associated with each text-based update. Facebook estimates that this could cost the company upwards of $75 million annually if Twitter was rolled out to its 120 million users.
When Facebook Connect rolls out Web-wide, the terms of any acquisition discussion will dramatically change as personal Facebook News Feeds will only increase in value as they connect disparate services from across the web, your updates and the updates of your friends, to a centralized social dashboard.Comments
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