Does Facebook Own Twitter? Here’s The True Answer
Facebook is the owner of most popular social media platforms, including Instagram Messenger, WhatsApp and many other tech companies. It is not clear if Twitter is one of the Facebook-owned companies. If not, why?
Facebook tried to take over Twitter twice, but it isn’t like that. A long time ago, the company offered to purchase Twitter for $500 million. This was at a time Twitter wasn’t as successful and needed more capital.
Twitter rejected Facebook with its proposal. This article will explain why Facebook failed to purchase twitter.
Table of Contents
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Why Facebook’s attempt to buy Twitter failed
- 1. The eagerness of the Twitter board to unlock its potential revenue
- 2. Facebook expressed concern about Twitter’s potential revenue-generating capabilities.
- 3. Facebook is concerned about the charges incurred by running Twitter
- 4. Twitter Changes CEO
- 5. Twitter wasn’t facing any real threat
- These are the Three Reasons Why Twitter didn’t sell to Facebook
- Conclusion
Why Facebook’s attempt to buy Twitter failed
Let’s now discuss why Facebook doesn’t own Twitter.
1. The eagerness of the Twitter board to unlock its potential revenue
The first and most important reason Twitter declined Facebook’s offer was because its board wanted to view Twitter’s revenue potential.
They believed Twitter would be able earn more and have the potential to do more than survive.
Investors were also intrigued by the CEO Mark Zuckerberg’s proposal to buy Twitter. If it weren’t for Twitter’s potential bright future, Facebook would not have made an offer to purchase it.
But everyone, including Evans Williams (new CEO of Twitter) and the investors knew it was a big risk because at that point Twitter wasn’t earning any money. It was tempting enough to sign a deal worth $500 million.
You could accept the money and walk away, but the pair chose to stay with the site and it has become one of the most popular social networking sites.
2. Facebook expressed concern about Twitter’s potential revenue-generating capabilities.
Many people assume that, if Facebook is willing to pay $500 million, which would be a large sum, it must have high potential for revenue generation.
However, this was not the case as Twitter’s revenue potential is low. It also has great potential for future innovations.
Because it was different from other platforms, this made the company more valuable. It is this reason that Facebook couldn’t buy Twitter.
3. Facebook is concerned about the charges incurred by running Twitter
If you are familiar with the basics of running a business, you should be aware that expenses can exceed revenue and the company won’t be able continue to function in the long-term.
There will not be profits. This means that Twitter’s revenue-generating potential was very limited at the time, which was Facebook’s main concern.
But it wasn’t the only external charge. Twitter also had other charges, which made Facebook question its decision. Facebook was forced to pay a $75 million annual fee by Twitter for sending messages via mobile phones.
4. Twitter Changes CEO
Another reason they could stand behind their decision to not sell was the change in CEO at Twitter, from Jack Dorsey’s co-founder to Evans Williams.
The Board realized that Jack was an insecure link and Mark Zuckerberg would have had a better chance of buying the platform.
Evans was the new company CEO, which changed many things. He was difficult to work with. This board decision worked miracles and Facebook did not buy it.
5. Twitter wasn’t facing any real threat
Evans Williams said back then that Twitter was not under threat by Facebook and there wasn’t any need to sell it. Each platform was unique and each has its own features.
Evan Williams said that there will not be any platform capable of “a credible threat to taking Twitter to zero”.
So, Facebook wasn’t a threat to Twitter, and there is no reason for Twitter to be sold.
Why Twitter Doesn’t Want To Sell to Facebook
These three reasons stem from Evan Williams’ email to the board, in which he explained why a person sells a business.
He listed all reasons an investor might consider selling a company, and why it wouldn’t be financially profitable for Twitter to go to Facebook.
FIRST
Evans said that he would often say that Twitter is a billion-dollar business and that it’s worth a lot more. The board and Evans’ belief in Twitter’s potential gave them enough cause to reject Mark Zuckerberg’s proposal.
When Facebook launched its 2008 offer for Twitter, there were approximately 1+ million Twitter users. However, the company wanted to see it grow in 2009 and 2010. Although the company was not making enough revenue, they believed it would one day.
SECOND
Evan Williams said that they might consider selling Twitter if Facebook posed a threat. It wasn’t, however, because Twitter and Facebook are two distinct platforms, and there was no threat to cloning.
Williams said that Facebook wasn’t equipped to clone Twitter. Therefore, Facebook is not Twitter’s rival and will never be. Their functions and platforms are very different.
Another reason Twitter did not sell to Mark Zuckerberg was because of this. Williams understood that a platform with innovative features and functionality can have a huge future and great revenue potential.
THIRD
Williams expressed concern about differences in working environments, and the culture mismatch that exists between Twitter and Facebook. In an email, he stated that selling is also an option if it meant that we could work with someone who was great.
Williams did not use Facebook, and was worried about their business practices. This collaboration will have a negative impact on Twitter, he said.
Twitter alone would have been far more profitable than Twitter, and he was certain that it will be a great source of income in the future.
It was clear that his move could have serious consequences for the company. A loss of $500 million would be a huge blow. His gamble paid off, and Twitter now ranks as one of the world’s most popular companies.
Conclusion
After hearing the arguments he made, board members believed in Twitter’s new CEO Evan Williams. They declined Facebook’s offer of Twitter acquisition. They might be proud now of their decision.
Williams wrote about the offer in a blog, without Facebook mention. He stated that he believes in his company’s potential.
He knew the company offering to purchase Twitter was not the best fit for his and his team. Twitter, a multi-billion dollar company, was his choice.
Now, we see that Twitter did not sell the company. Facebook may still regret its decision.
We hope that we’ve briefly explained all of the reasons why Facebook was unable to acquire Twitter.
Faqs
Basis for Comparison Facebook Twitter
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Founders Mark Zuckerberg Jack Dorsey
Released in 2004 2006
San Francisco, California, U.S.
Facebook is a corporation and online social networking service headquartered in Menlo Park, California, in the United States. Twitter is an online social networking service and microblogging service that enables its users to send and read text-based messages of up to 140 characters, known as “tweets”.Facebook is a corporation and online social networking servicesocial networking serviceGoogle+ (pronounced and sometimes written as Google Plus; sometimes called G+) was a social network owned and operated by Google. The network was launched on June 28, 2011, in an attempt to challenge other social networks, linking other Google products like Google Drive, Blogger and YouTube.https://en.wikipedia.org › wiki › Google+Google+ – Wikipedia headquartered in Menlo Park, California, in the United States. Twitter is an online social networking service and microblogging service that enables its users to send and read text-based messages of up to 140 characters, known as “tweets”.
Meta Platforms, Inc.
Facebook, Inc. “Facebook to Acquire Instagram,” Accessed March 31, 2020. TechCrunch. “Right Before Acquisition, Instagram Closed $50M At A $500M Valuation From Sequoia, Thrive, Greylock And Benchmark,” Accessed March 31, 2020.
Odeo, Twitter’s parent company, is started. Odeo’s podcasting service is released, with very little public response.
Conclusion
Facebook tried to buy Twitter twice and failed because it was concerned about the charges incurred by running it.
