November 24th, 2008
Twitter is smart to reject Facebook and go it alone
Talks between Facebook and Twitter have broken down, Kara Swisher reports in a post on the Boomtown blog today, and - on the surface - it looks like the dividing issue was money. (Isn’t it always?) Facebook was offering $500 million in Facebook stock based on what what Twitter considered to be an inflated valuation. So, Twitter said no and the two have apparently moved on. (Techmeme)
But there’s another reason Twitter said no - and I respect the execs that much more for it. Simply, Twitter wants to keep growing on its own and figure out its own revenue model. And who could blame them? After all, just because Facebook is sitting on more cash right now than Twitter is doesn’t mean that Facebook has it all figured out either. Facebook CEO Mark Zuckerberg has said he is focused on growing the site, not making money, for the next three years. Twitter, on the other hand, has said it will reveal revenue models in the first half of next year.
Sure, Twitter users can integrate their messages (called Tweets) into Facebook’s status updates, so they’re already working together in some ways. But, at least in my own usage experiences, the Tweets and the Facebook status updates are very different. Facebook is sort of the place where I share details of my life with friends and other acquaintances - people that I’ve invited and accepted into my world. Twitter is the place where I sort of just broadcast out to anyone who cares to listen. 
Sure, Facebook is larger and offers much more than just updates. But I tend to find more value in Twitter. Case in point: Twitter, via SMS updates, is the way I stay in the loop. Nope, I’m not talking about tweets from a buddy who wants me to know that he’s nursing a hangover. Instead, I’m referring to updates from legitimate news sources, such as CNN, New York Times, CNET and, yes, even my colleagues on ZDNet. For that, I’d be willing to pay a premium. (Ssssh. Don’t tell anyone.)
Bottom line: I’m glad Twitter has decided to stick it out and go it alone. Sure, a rejection of Facebook is something that could backfire on them. But there are also no guarantees that Facebook will stay at the top of its game while they spend the next few years trying to develop a revenue plan. At least with Twitter, we’ll have a better idea in six months or less as to where the business model is headed. If it’s not a very good plan, I’m sure I’ll hear all about it - via Twitter, of course.
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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