Facebook has had a $500m offer for social networking site
Twitter rejected.
The offer was not a straight cash deal but in stock form with
Facebook's valuation at $15bn which came from the Microsoft
investment in October. A more accurate valuation of Facebook is
around the $5bn mark making the true value of the offer $150m.
Twitter is two
years old and does not make any revenue at the moment despite
looking at adding advertising and charging business customers next
year. So far Twitter has not found a revenue stream to rely on and
depends on private investors.
Twitter's investors were looking for a monetary deal or stock at
what they felt was the true value of Facebook as opposed to the
overvaluation proposed.
It seems one of the main reasons to reject the offer was that
Twitter's investors believe it has opportunities to grow and that
accepting the first offer on the table would restrict its
potential.
So what is Twitter?