Facebook wanted to buy Twitter while it is still surfing the social networking wave but Twitter, feeling that it could be the next great thing, said no, arguing that it is worth more than the $500 million worth of Shares that Facebook put on the table.
Twitter investors are either very smart or they know something that we don't. As for Facebook, well, there are a few other companies that they could either buy or merge with, arguably using its overinflated shares as the only (acceptable) currency.
Facebook could do a massive stock swap with Ebay to bag leading VoIP company Skype which was purchased back in September 2005 for $2.6 billion in one of the most controversial and baffling tech acquisition. In October last year, Ebay took a $1.4 billion charge related to the Skype transaction. Now, unlike Twitter, Skype has a solid revenue model and far more members. Skype has more than 300 million user accounts, that's a 40 percent increase year in year. Ebay could leverage the Skype brand and get a substantial percentage of Facebook (maybe 20 percent). So that's a win-win situation. Facebook gets a killer app for its social networking website, Ebay gets a way to virally spread its core services.
Unlike Skype, Linkedin is about quality rather than quantity. The business/professional social networking website boosts more than 30 million registered users and is generally regarded as the business version of Facebook. The company is valued at round $1 billion after the latest fund raising session in June 2008. The two companies could form a great partnership with Zuckerberg at the helm and Linkedin could potentially become a vital profit-generating "Facebook Pro" section in the future.
3. Hi5 or Friendster
Hi5 and Friendster are the last remaining major independent social networking websites as Bebo and Myspace have already been acquired. Facebook could acquire Hi5 or Friendster to bolster its presence outside North America, in an all-stock transaction and could literally add nearly 70 million visitors to its userbase (that's roughly 50 percent) overnight.
Rapidshare is a site which allows its users to upload files online. While this is a fairly straight forward and no-frill thing, it is one most popular websites on the planet, ranked 12th in Alexa's table (Facebook is 5th). File uploading (and associated features) could also become a killer app for Facebook as it would allow its millions of users to share files seamlessly within a secured environment. Rapidshare has 40 million daily users, generates 60 billion page views per month and churns 4.5 petabytes of data. Like Hi5 and Friendster, Rapidshare's strengths lie outside the US.
5. Daily Motion
Daily motion is a video sharing file website like Youtube but currently is a distant second to the Google-owned company and like most of the above potential acquisitions is strong outside North america. The company, whose slogan is Watch, Publish and Share, would be an exciting match for Facebook given the fact that it would bring in online video facilities to the social networking website (with around 1 billion pageviews per month) and bolster Facebook as a better Myspace. Facebook as a video player but its functionality is rudimentary and not properly integrated in Facebook.
And a bonus sixth one is Yahoo.... As it stands, Yahoo is worth less than Facebook on paper, so a merger, even if it appears inconceivable would give Yahoo some fresh blood.