Houston, we're uncomfortable.
Facebook and Twitter have shuttered "several weeks of serious talks" in which Facebook tried buying the microblogging service for $500 million worth of its own stock.
The news was broken by Kara Swisher of All Things Digital. Rumors of Facebook's interest in Twitter first surfaced at the Web 2.0 Summit several weeks ago.
While the idea was dismissed by speculators at the time, it turns out Twitter and Facebook execs were just wrapping up discussions of a potential buyout. Talks were reportedly initiated by Facebook in mid-October.
According to Swisher, discussions dissolved after concerns about integration and related costs were left without a resolution. Twitter was also skeptical about the actual value of $500 million of Facebook stock, pointing to the social network's $5 billion valuation — which would value the offer at $150 million, decidedly too low — and demanding cash in lieu of stock.
At the Web 2.0 Summit, CEO Mark Zuckerberg dismissed reports that Facebook is strapped for cash and may require VC funding. The company lost a co-founder in October — the type of news that always sparks speculation about the prospects of a once-promising startup.
Meanwhile, Twitter oscillates between traffic growth and financial stagnation. It racked up 343% in year-over-year audience growth, making it one of the fastest-growing social networks online.
But despite its popularity with both high-profile influencers and brands, the site has failed to monetize its business model. Last week it began toying with the idea of charging companies that use it for customer feedback or troubleshooting.
Twitter lost its chief architect, Blaine Cook, in late April. In June, Amazon's Jeff Bezos infused the site with much-needed cash to update its infrastructure.
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