The Twitter-Facebook deal that wasn’t to be

So it turned out to be more than a rumor after all.

Kara Swisher at the AllThingsD blog offers us the story of the deal talks between two of the hottest properties on the social Web: Facebook and Twitter.

Various iterations of the deal would have seen Facebook acquiring the microblogging site for $500 million in stock (raising the very important question of what privately held Facebook is actually worth) or up to $100 million in cash.

Apparently the companies couldn’t agree on price, and Twitter ultimately decided it was better off on its own.

The post-mortems around the Web have followed some predictable lines: How much would Twitter improve Facebook? What’s Twitter really worth? How compatible are their business models?

Business models? Right — neither company is exactly swimming in the black these days. Twitter makes no money — it’s looking ahead to an enterprise play where companies would pay a fee for some type of corporate service. Down the road, Facebook may have designs on the enterprise as well, but for the time being it’s sticking with ads and e-commerce, and it’s not setting the world on fire in those areas.

What both sites have going for them is an extremely dedicated user base that is growing by leaps and bounds. More eyeballs than dollars.

So would mashing them up make sense? Hard to say. As an inveterate skeptic of pure-play social media as a sustainable business model, I’ll happily recuse myself from that question.

Facebook and Twitter are both phenomenal for their respective successes. Each has tapped into a main nerve in the ranks of youthful Internet users who share the insatiable desire to express themselves and keep tabs on their digital acquaintances.

Fair enough. But for one company that hasn’t cracked the monetization riddle to acquire another that hasn’t really begun to think about it seems problematic.

Wouldn’t it make more sense for Microsoft to step in with one of its trademark sky-high valuations and bolt another piece onto its rather shapeless Internet division? Or Google? Or why not News Corp as it continues to expand its media empire? Or, better still, how about fold it into those ceaseless Frankenstein deal talks between AOL and Yahoo?

Er, maybe not that last one.

News Around the Web