Why Twitter Didn’t Sell To Facebook In 2008

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 book Hatching Twitter: A True Story of Money, Power, Friendship, and Betrayal. 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, 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: $500 million. Zuckerberg was not shocked, as Dorsey had already informed him that this was the range that would be sought. In 2008, Twitter had fewer than 11 million users, and had yet to see the exponential gains that would come in early 2009 as a result of publicity like Ashton Kutcher’s public race against CNN to be the first million-follower account. Twitter’s current IPO filing places a roughly $11.9 billion value on the company. Even with a crappy infrastructure still wobbling under the weight of the users it did have, Twitter’s leadership had faith.

In 2008 the board agreed with Williams’ reasoning and declined the offer. Zuckerberg would then go on to court Dorsey heavily, but refuse to give him a head of product position. Dorsey never went to Facebook, and when Twitter IPOs, he’ll get his voting shares back.