Despite floating a very attractive offer, Facebook‘s bid to acquire Twitter in exchange for $500m worth of stock failed after the two companies failed to agree on the stock’s value.

Facebook has expressed its interest in acquiring the micro blogging site for a number of weeks. However, the main stumbling block was the disagreement over whether or not Facebook’s stock was worth the effort.

The social networking giant was offering 3.33% of its stock, valuing Twitter at $500m, based on what Microsoft paid when it purchased a 1.6% stake in Facebook for $240m in 2007.

Twitter investors and management saw that figure as inflated and valued the shares at a lower level, putting Facebook’s value in the $5b range rather the 2007 estimate of $15b.

It has been a tough time for net stocks, which have plummeted in recent months – even the net world’s big boy, Google, dropped 61%.

Biz Stone, co-founder of Twitter, says that “the company wants to remain independent to expand on its messaging service and try its hands at building a functioning revenue model”.

Twitter has over 6m registered users compared to Facebook’s 120m, but as yet has to develop a way to generate significant revenues.

It is, however, one of the fastest growing Web 2.0 platforms – registration numbers have grown 600% in the past 12 months.