Twitter Turns Down $500 Million in Stock from Facebook

A few weeks ago Facebook offered to buy Twitter in exchange for $500 million worth of Facebook stock (at Facebook’s $15 billion valuation by Microsoft).
The talks are now over with no sale planned.
Looks like Twitter walked away due to a) price — they wanted to get in at Facebook’s $5 billion valuation, not $15, and b) they still think they can monetize the service.
Twitter had 6 million users in October, up 600 percent year over year.
Thus far Twitter has raised $20 million at a $98mm valuation.
We all know what would have happened if Zuckerberg had sold the first chance he got, but that doesn’t mean its never a good idea to. It will be interesting to see how Twitter tries to monetize the service. I would look into a self serve ad system that lets people bid on keywords that individual people tweet. The ads would have to fit Twitter’s 140 char. format and be tweeted to users once every ___.

Do you think Twitter should have sold?

BoomTown