So, Twitter still believes it can figure out how to generate some revenues. Kara Swisher is reporting that the rumors about Facebook acquiring Twitter were not only true, but that talks between the microblogging company and the social-network site broke down three weeks ago. The social net was offering to acquire the company for $500 million of its stock, but Twitter execs and investors apparently believe the company should “take a shot” at building revenues “as well as it [has] done building its growth” and not just jump at the first chance it gets to sell the business.

Of course, there was also the matter of price—or, in this case, is half-a-billion dollars worth of Facebook stock really worth half-a-billion dollars? Facebook was pricing the transaction based on its own $15 billion valuation following Microsoft’s investment in it. But Twitter believed a more accurate valuation was $5 billion, making the deal worth $150 million.

Twitter, which has raised a total of $22 million in funding, has famously struggled to find a way to generate revenues, though CEO Evan Williams said in an early November interview that it was looking at various options, including charging companies to reach its users, or selling ads on its search engine. Facebook did have concerns over the lack of revenues. Twitter pays for users’ messages to be sent to cellphones. If Facebook were to offer the service to its 120 million members, that could be quite an SMS bill for the social net to deal with, on top of no apparent revenues coming in. Moreover, as BoomTown quotes another source, “Facebook has its own revenue-generating challenges.”  But despite the rejection, the social net is apparently still interested in the company: “We’d hate to see Twitter go to another company,” another source said. Is it just a matter of time then before we see a tieup?

• Twitter Gets Message To Find Ways To Make Money In Tough Economic Times