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November 4, 2013 11:36 pm GMT
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/HKrvxjAO3GQ/
The Three Reasons Twitter Didn't Sell To Facebook
Facebook’s Mark Zuckerberg tried to acquire Twitter not once but twice, through official channels and via co-founder Jack Dorsey. The details of the efforts are revealed in Nick Bilton’s new bookHatching Twitter: A True Story of Money, Power, Friendship, and Betrayal. I’ll have a full review of the book soon, but I found one passage in particular worth noting. It was late October of 2008, shortly after Dorsey had been ousted as CEO and consigned to a silent role as Chairman, with no voting stock or operational control. Fellow Twitter co-founders Ev Williams and Biz Stone had been invited to visit Facebook for a sit-down with CEO Mark Zuckerberg. The purpose? An acquisition of Twitter. Zuckerberg, Bilton explains, had been working Dorsey for months to try to arrange a buyout. But his plans were thrown into disarray when Dorsey was yanked from the CEO slot. An email at one point to Jack had given a point-by-point reasoning on why Facebook+Twitter made sense. Among those reasons was the customary threat that Facebook could choose to ‘build products that moved further in [Twitter's] direction’, a tactic that we’ve personally heard many accounts of Zuckerberg employing. The implicit threat: sell to us or we’ll clone your product. During the meeting, Williams and Stone threw out a valuation: $500M. Zuckerberg was not shocked, as Dorsey had already informed him that this was the range that would be sought. But the sale didn’t happen, and the reasoning behind the rejection was outlined in an email by Williams to the board, which is partially quoted in Bilton’s book. It seems to me, there are three reasons to sell a company, Ev wrote in an e-mail to the board outlining why they should decline Facebook’s offer. 1. The price is good enough of or a value that the company will be in the future. (“We’ve often said that Twitter is a billion dollar company. I think it’s many, many times that,” Ev Wrote.) 2. There’s an imminent and very real threat from a competitor. (Nothing is going to “pose a credible threat of taking Twitter to zero.” 3. You have a choice to go and work for someone great. (“I don’t use [Facebook]. And I have many concerns about their people and how they do business.”) There are a few interesting points in this passage, which we’ve emphasized. First among those is that the board saw TwitterOriginal Link: http://feedproxy.google.com/~r/Techcrunch/~3/HKrvxjAO3GQ/
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