Why did Twitter say no to Facebook?

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Why did Twitter say no to Facebook?

San Francisco (CA) – A union between Facebook and Twitter just is not in the cards at this time. However, that is not to say that the companies will not talk again in the future. Evan Williams, the chief executive and co-founder of Twitter, delivered that message in a discussion at the Churchill Club in San Francisco Tuesday night.

Williams said that Twitter rejected the $500 million (mostly stock) offer from Facebook.  “We explored it, as we should. We took it seriously,” Williams said. “It definitely made sense – the strategy we talked about with them – but it wasn’t the right time.” Ultimately, he said, Twitter decided that it had too much left to do, beginning with figuring out how to make money.
“Maybe we’ll see each other in the marketplace,” Williams said.
Twitter is a social networking site that became popular in March 2007, allows its users to broadcast messages of up to 140 characters via their cell phone or the web. The site struggled with technical difficulties and constant service interruptions until this fall. Currently, the site has 6 million registered users, even though the number of habitual users is far fewer.
Twitter has raised $20 million in financing from venture capitalists, but has yet to bring in substantial revenue. The company thinks that focusing on growth is far more important at this time. Williams original plan was to begin trying to raise more capital starting mid-2009, and he doesn’t think to have to worry about producing income until around 2010.  

The current economic climate has changed his views and his plans: “I don’t want to have to raise money in 2009,” Williams said. The company will now focus on income in the first quarter of next year.

Williams claims that Twitter receives calls on a daily basis from companies who would like to pay for sponsorships, however they want to refrain from making their revenue off of advertising. Instead Twitter plans charge customers who utilize Twitter as a means to communicate with other customers or sell products. Companies such as JetBlue Airways, Dell and Whole Foods Market have used the website in this manner.
So far, though, “we haven’t studied the business cases much,” Williams said. “We literally have no business people in the company, so this isn’t an area we’re really focused on.”

During his speech, he discussed a few large projects that Twitter has in the works. One of their projects is a plan to move the search function, which is difficult to find, to the home page. Twitter also wants to make the service more user friendly, making it simple to search for friends who utilize the service – and  change the filtering methods and enable formation of groups so that individuals can control which messages reach which of their followers.

Twitter has been so slow to adopt changes, which Williams deemed “low-hanging fruit,” he said, “that it’s amazing anyone uses Twitter today.”

Williams also claims he still has great visions for the company. His track record includes the founding of PyraLabs, which created Blogger a decade ago and then sold it to Google in 2003.  “I worked on Blogger for six years and I don’t think it’s nearly as big as Twitter. Twitter will dwarf that,” he said.

Williams feels that the greatest threat to Twitter is individuals who have had a chance to see the concept and feel that they can do it both bigger and better. Twitter will more than likely begin to see major competition in the future.

The concept that companies like Microsoft or Google will open up a microblogging service is one of Williams’s greatest fears. “I’m pretty sure they all are about to launch something like this,” he said.
Ten years ago, Blogger was one of the first services that gave individuals the right to instantaneously publish their own content. Blogger was something that forever changed the face of media and the way individuals utilized the internet for communications. Twitter is an update to that transformation and is bringing social media and blogging into the future.
“I was surprised by blogging. It took me a while to realize the profundity of blogging,” Williams said.

One thing that does not shock Williams is the use of Twitter in the press. For example, it was recently used widely during the Mumbai terror attacks, and it was also a huge hit during election time. “I’ve actually been waiting for it to happen,” Williams stated. The day Barack Obama was elected president was Twitter’s most-trafficked day ever.

Even though Twitter is widely known and has a large subscriber base. Williams continuously pointed out that the company is still merely a small startup with only 25 employees: “It’s good that the expectations are high, but give us a minute.”