For Twitter to turn down Facebook's acquisition offer, they must have a damned good plan for beating them in the "status" war, because FB is on the attack and gaining ground.
Facebook wants to aggregate status between friends. Twitter wants to aggregate status between topics. This fundamental difference drives extremely different models for using micro-updates and subsequently renders Facebook and Twitter as non-competitors.
Really? It's always seemed to me that Facebook wants to own your address book and inbox, while Twitter wants to own real time news/search/intentions. But maybe that's just what you said from a different perspective.
In Twitter's case, realtime status, micro-blogging, and me-too viral spread were the hooks that drew in the masses. The business model looks to be about in creating link between local businesses and local customers. Pub-sub.
Ex: I (business/publisher) announce a special, you (customer/follower) receive the note and respond accordingly.
The problem is, I think, that Twitter has given away too much of the core value of the platform already (they had to in order to grow). I think it will be hard for them to create 'tools' to improve on this interaction and cause businesses to be willing to pay for it. I think this is why everyone is on the edge of their seats about this, because everyone thinks in the back of their minds that it can possibly happen but no one can easily connect the dots. From our perspective, if they do pull it off, it will seem somewhat miraculous.
What is that plan?