Facebook offered $ 500 million to Twitter, but negotiations between the two companies finally wrecked.

Twitter is a social network based in instant short messaging up to 140 letters, it was the first website to popularize the concept of ‘microblogging’.

Facebook is one of the most popular social networks in the United States. Facebook was launched in 2004 with the aim of helping students in U.S. schools and colleges to exchange information and maintain contact with friends, but today is open to any person around the world.

According to reporter Kara Swisher, Wall Street Journal, the discussions on the purchase began in mid-October and departed for Facebook. But sources on both sides indicate that the conversations were closed for lack of an agreement that could satisfied both sides.

The main reasons for the deal collapsed Tuesday were… the price – the purchase would be paid in shares of Facebook and Twitter seems to think that the price of the shares of the other social network in the market was overvalued – and the concerns about cost and integration, said the Kara sources.

However, apparently the main reason why the negotiations failed is that investors still want Twitter to try to create a business model for the tool to generate revenue and become more profitable and, therefore, with a market value much higher to today.

Launched in 2006, Twitter has reached 6 million users in October 2008, a growth of more than 600% over last year. Despite the growing popularity, the tool faces problems of infrastructure and its main challenge is to become profitable.

The Twitter has received more than $ 20 million and investments. Its market value was estimated at $ 98 million in the latest round of investments. According to its investors, the potential for growth is still too big and not even the economic crisis will be able to prevent the growth of Twitter.

Via: Silicon Alley Insider.