That’s what Kara Swisher suggests this morning. I’ve been saying for weeks now that Facebook needs to hurry up and open their status API so they can put an end to Twitter’s growth but many people are skeptical of such a situation. The second best option would of course be to acquire the company. If you put two extremely hyped companies together do you create a lot of value though?
That’s definitely debatable but both founders clearly have the “chutzpa” as Swisher puts it, to go after ridiculous valuations despite clear revenue models. It’s not really apples to apples though. Facebook has a fairly large revenue model through advertising whereas Twitter has yet to make a penny. Yesterday Howard Lindzon wrote that he’d put his money in Twitter rather than buying Facebook stock at a $5 billion valuation though. Speaking of which, please let us know if you’d like to buy Facebook stock at a $5 billion valuation.
Anyways, if Twitter gets any more hype in this economy we may still be in a mini-bubble among social networking entities. The site clearly has a ton of growth but it only has around 5 million users, valuing each user at around $40 in the latest investment round. If each Facebook user was worth the same, Facebook would be worth around $6.4 billion which would mean buying Facebook stock at $5 billion would be a bargain!
The group that’s investing in Twitter may actually be just betting that Twitter and Facebook will merge and at Facebook’s current valuation in the secondary markets, the investors will just about break even. Before any merger takes place though, Facebook should seriously consider releasing a public API for user statuses. I’m confident that this would put a serious dent in Twitters growth.
So do you think Facebook should make another run at Twitter? Should Facebook launch a public status API? Is all this conversation completely ridiculous?
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I'm not so sure Facebook should buy Twitter. If, in fact, they consider Twitter a threat, Facebook should do as you suggest and take them head on by releasing a public API.
It would be much cheaper to do it your way. I think it's inevitable.
Comment by Facebook User — January 26, 2009 @ 11:56 am
Maybe a little too patronising this time Nick, especially the way you seem to put Twitter in the "social network hype mini-bubble" but not Facebook.
They inhabit the same Web 2.0 world…
Comment by Thomas M — January 26, 2009 @ 2:33 pm
Twitter does have a far smaller user base, but it looks like a much higher proportion are using it as a business tool. Financial value is being created "around" Twitter, even if Twitter hasn't figured out how to capture it yet. I guess that justifies a speculative valuation.
Speaking personally I use Twitter to talk to work contacts and find new ones. Facebook is purely a recreational tool for me, and most others.
I reckon Google would make more sense as a buyer. They have a proven record of turning text content into money, which is what Twitter needs to do.
Comment by David Barnes — January 27, 2009 @ 1:58 am
PS Facebook buying Twitter would be foolish also because the "social graph" on Twitter is so different to the social graph on Facebook. There's no way you could merge Twitter followers with Facebook friends.
Comment by David Barnes — January 27, 2009 @ 1:59 am
I think Facebook buying Twitter would be premature. Why buy something that hasn't proven its ability to monetize? Far better to let Twitter sweat it out and in the mean time get moving on opening up their status API. That will let Twitter sink or swim. There are a lot of non-people on Twitter (spam accounts) so I don't know how you get a real bead on how many actual users there are. It might be more valuable to say, out of all 5 million Twitter users, how many of those accounts have multi-node connections to other multi-node connections? In other words, how many real influencers are there? How are *those* users using Twitter? I think there must be other ways to slice the metrics in a more meaningful way. Till then, Facebook stands head and shoulders above Twitter and would probably virtually wipe the floor with a status API.
Comment by Mariana Evica — January 27, 2009 @ 5:09 am
I don't see it. Twitter is a great site for its users, but I am not quite sure how it is going to make money. Facebook already makes money – why would Facebook want Twitter? Twitter is a unique entity, but I'm not so sure that I would like to own it.
Comment by Scott Becker — January 27, 2009 @ 6:23 am
Nick, even if they did open up statuses in the API, Facebook still wouldn't be in the same position as Twitter because user profiles don't have unique username identities – and that's a key part of the Twitter experience and the reason that the API works so well outside a walled garden. In Facebook, there's no way easy way to reference someone's profile (and link to them) – whereas Twitter gives us this great @username artifact which is applicable whether the tweet exists on Twitter, or on another .com. Facebook profile URLs are terrible from a human or search engine perspective. Twitter profile URLs are short & sweet and rank well in Google.
However, I do agree that Facebook could do so much more to stunt Twitters growth. Firstly, they need to change the friendship model to one of follower/following form (which means I wouldn't need to hear from the people I don't want to receive updates on, but who want to follow me). That would be hard to do because Facebook is built on privacy and sharing based on real world relationships. Secondly, they need the @username convention – and at this stage, trying to force unique usernames on the Facebook userbase would be difficult.
Comment by Neil — January 27, 2009 @ 10:20 am
I'm probably one of the few techies right now that haven't bought into the twitter hype. Collaboration is all about the community. I have one on Friendfeed and a couple on Facebook. Most of the twitters that I'm interested in on a professional level I see either in Friendfeed or Facebook (along with all their other internet activity I might add and with much better threaded conversation). So many people just pump their twitter input out to one of these applications anyway.
Granted, Facebook still needs a lot of work to assist and educate people in differentiating between their personal and professional communities, but that is not isolated to just their social network; it is people dependent. I do agree that with some very small changes they do have an opportunity to put a major dent in Twitters community. However if they are not able to build a culture for professional communities, then it will stay focused on the personal side. In my opinion, this is one area where twitter has really put the boots to Facebook. If twitter is a way for them to provide increased exposure to people wanting to interact on a professional basis then they should buy them. Otherwise they need a fresh approach for professional communities.
Nevertheless, I find Facebook, Friendfeed & Twitter still have way too much noise mixed in with the content I want to read. Google Reader with personalized RSS feeds is still my number one source to gather information and link out to collaborate on specific posts.
Comment by Facebook User — January 29, 2009 @ 11:26 am
For me, there is a big difference in the way I connect with other people on Facebook and Twitter. On Facebook I tend to connect with people I already know, on Twitter I connect with people that I would normally never meet in any other way.
This difference is probably caused by the open invite structure in Twitter, opposed to the confirmation invite in Facebook. A quote I like (thx Phil Baumann) on Twitter: Twitter is to brains what Google is to servers. If you want portals into those brains, get on Twitter.
Also the fact you can easily decide to unfollow people on Twitter makes it easy to filter to only follow people that are of interest.
The two platforms differ so much that way, I see no successful way to integrate the two.
Just the $0.02 of a Facebook & Twitter user.
Comment by Hans Looman — January 29, 2009 @ 3:24 pm