Why Twitter Turned Down A $500m Buyout Offer From Facebook (And Why Twitter SMS Is Here To Stay)

Interesting interview in the Financial Times with a slightly prickly Biz Stone, the co-founder and creative director of Twitter, and the man who, until very recently, put most of the words down on the company’s official blog.

Amongst the topics discussed are why Twitter rejected Facebook’s estimated $500 million buyout in 2008.

The negotiations fell flat. Facebook’s owner could offer Stone, Dorsey and Twitter’s other co-founder Evan Williams nothing that they wanted, according to Stone. “We’ve created something that people are finding value in,” he says, “But we haven’t yet created a business out of this, and we really wanted to do that.”

Though the value of the company was recently estimated at $3.7bn, it runs at a loss. When Stone appeared on the US comedian Stephen Colbert’s show, the host commented that the name Biz “doesn’t stand for ‘business model'”. Stone hopes that Twitter will turn a profit thanks to such bolted-on cash generators as paid-for promotional tweets that appear as the result of some searches. He appears nonplussed, however, by my standard business interviewer’s question: what is your exit strategy? “Exit is a weird word,” he replies. “We are not taking that path. Our path is following our passion.”

Stone confirms that Twitter will continue to target SMS:

“We want to go on growing globally and make Twitter widely available on SMS,” Stone says, “There are 5bn phones in the world that can handle SMS, many of them in places that do not have the internet.”

I can understand the why; I just hope that this doesn’t continue to restrict the platforms evolution. Sure, offer SMS as an option – to do otherwise would be foolish, as there are probably billions out there where SMS is the only viable option – but make it like the mobile version of the service: an alternate. Don’t let the limitations of catering to (the very crude) SMS technology keep the main network held back.

Stone also briefly discusses his experience with The Social Network, the critically-acclaimed (and absolutely fantastic, says this writer) movie about Facebook pioneer Mark Zuckerberg, and you’ll also find out where and how he acquired the nickname ‘Biz’.

Beauty is in the eye of the journalist, of course, but Stone comes across as a little socially awkward, and like Zuckerberg, one reads with irony at the thought that yet another pioneer of social media is perhaps more than a little uncomfortable under the spotlight. Worth a read.

(Source: Financial Times.)