As reported by Kara Swisher on All Things Digital, talks between Facebook and Twitter over an acquisition deal have ended and no agreement has been reached. Sources say “Facebook was offering to acquire Twitter for $500 million of its stock,” but talks broke down “over price and the typical concerns about integration and costs.”

Facebook Brought Twitter to the Table, But Couldn’t Hold On

The talks had been initiated between the two companies by Facebook in mid-October, with top execs and investors all involved in discussions about bringing the two together. Other reasons the deal was turned down are attributed to feelings from Twitter’s investors that “the startup should still take a shot at building its revenues as well as it had done at building its growth.”

Similar to Their Extraordinary Growth, Investors Hope the Same can be True of Future Twitter Revenues

Though Twitter experienced many infrastructure problems earlier this summer, recent months have seen Twitter shining. New numbers in the article state Twitter having “about six million registrations, as reported in October, up 600 percent over the last year.” These new numbers are actually twice those of what bloggers and consultants have been quoting for the past several months.

Lack of Revenues was a Factor in the Deal

The problem of Twitter not having any current revenues was also an issue for Facebook. Despite operating for two years with $20 million in funding from Union Square Ventures, Charles River Ventures, Digital Garage, Spark Capital, Bezos Expeditions and well-known Silicon Valley figures such as Marc Andreessen and Ron Conway, Twitter has yet to turn out a business model. They’ve talked about paid corporate accounts and an ad-supported version, but nothing official has been released.

Final Thoughts

Overall, I’m glad Twitter passed on the deal. For me, Facebook and Twitter are two very different beasts. Although Facebook has tried to implement microblogging into its feature set (with it’s own Status Updates), it still hasn’t quite captured the more simplistic essense of microblogging. In a way, Facebook feels more like FriendFeed, a constant stream of activity from friends and contacts. Twitter and microblogging are much more streamlined and simplistic.

Here’s to hoping Twitter is able to find a business model that lets them keep it that way.