Kara Swisher reports that Facebook a few weeks ago nearly bought Twitter for $500 million in stock. The question of a Facebook-Twitter union came up at the Web 2.0 Summit a few weeks ago, and apparently, this was right when the companies were at the tail end of discussions. The talks have now ended, Swisher says, citing unnamed sources from both companies. Apparently, the deal broke down over price as well as integration and cost concerns, but Twitter investors and execs also felt that the startup should now narrow its focus to generating revenues, of which there are currently none. …

Will a recession finally kill off the banner ad? Mediaweek's Mike Shields thinks it might. In the midst of a recession, advertisers cut back on brand spending, moving instead to performance based ads, which is bad news for the banner. As Shields says, "Whether traditional banner ads, skyscrapers or 350x200 rich media units, Web ads are eminently ignorable, and rarely move one to laugh or cry." In fact, some industry experts claim that image-based ads are ripe for a rethink. "There is still a school of thought that it is a low-impact ad environment," said eMarketer analyst David Hallerman. "With …

The San Francisco Chronicle sits down with LinkedIn CEO Dan Nye to discuss the professional social network's fortunes in 2008. At last count, LinkedIn was the fourth largest social networking site, behind MySpace, Facebook and Classmates.com. It is also the fourth fastest growing social network, according to the Chronicle report, behind Twitter, Tagged.com and Ning, with membership of 30 million. The private company is expected to rake in $100 million in ad revenue in 2008, up from $10 million at the end of 2006. In June, LinkedIn raised new capital valuing the firm at $1 billion. "What's most gratifying is …

Fortune's Richard Siklos wonders whether the "You" in YouTube is slowly dissolving. Big media companies are increasingly selling their "video wares" on the Google video site, which used to more prominently feature user-generated videos. Nowadays, it pays to put your video on YouTube's front page or buy placement on the site's search engine, the Web's second largest. Recent deals with CBS and MGM Studios underscore YouTube's push to play catch-up to the amount of professional video available on sites like Hulu. Google is obviously pursuing this route because advertisers have proven to be more interested in professionally produced Web video. …

Microsoft is once again rebranding its search engine, TechCrunch says, citing a Microsoft source. The software giant plans to rename Windows Live Search sometime early next year, and "Kumo", a Japanese word meaning "cloud" or "spider" is apparently the frontrunner, according to the blog LiveSide. Microsoft recently purchased the Kumo.com domain name. According to TechCrunch, very few people inside Microsoft are privy to the pending change, and "Kumo" has not been confirmed, although a source claims that a final decision about the new name has been made. Michael Arrington wonders why Microsoft would go to the trouble …

Google on Thursday unveiled new personalization tools that allow users to re-rank and edit search results. The SearchWiki tools let anyone logged into a Google account move results up or down, delete them entirely, or add personal notes through markers that appear next to each entry. The changes do not affect anyone else's search experience, although users can click a separate link to see a view that reflects changes made by other SearchWiki users. Marissa Mayer, Google's VP of search products and user experience, tells The Wall Street Journal that the tools are particularly useful for searches that users do …

Microsoft is considering selling bonds for the first time in its history, Bloomberg reports, a curious move considering the software giant's $20 billion cash hoard. An SEC filing noted that the company is now free to issue debt at any time. What does Microsoft need to raise capital for? Silicon Alley Insider reminds us that the software giant sought to at least partially pay for a Yahoo acquisition by issuing debt. Of course, that deal fell apart, leaving no obvious reason as to why the company would continue with the registration process. Is Microsoft preparing another bid for Yahoo? …