Facebook wanted to buy Twitter while it is still surfing the social networking wave but Twitter, feeling that it could be the next great thing, said no, arguing that it is worth more than the $500 million worth of Shares that Facebook put on the table.
Twitter investors are either very smart or they know something that we don't. As for Facebook, well, there are a few other companies that they could either buy or merge with, arguably using its overinflated shares as the only (acceptable) currency.
1. Skype
Facebook could do a massive stock swap with Ebay to bag leading VoIP company Skype which was purchased back in September 2005 for $2.6 billion in one of the most controversial and baffling tech acquisition. In October last year, Ebay took a $1.4 billion charge related to the Skype transaction. Now, unlike Twitter, Skype has a solid revenue model and far more members. Skype has more than 300 million user accounts, that's a 40 percent increase year in year. Ebay could leverage the Skype brand and get a substantial percentage of Facebook (maybe 20 percent). So that's a win-win situation. Facebook gets a killer app for its social networking website, Ebay gets a way to virally spread its core services.
2. Linkedin
Unlike Skype, Linkedin is about quality rather than quantity. The business/professional social networking website boosts more than 30 million registered users and is generally regarded as the business version of Facebook. The company is valued at round $1 billion after the latest fund raising session in June 2008. The two companies could form a great partnership with Zuckerberg at the helm and Linkedin could potentially become a vital profit-generating "Facebook Pro" section in the future.
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