In fact, co-founder Ivan Kirigin’s first day at Facebook was last Monday–four days before he and his wife, Abby, announced that they are shuttering their start-up.

Confused? You should be: This is one of the odder M&A stories I’ve seen in a while. Not surprisingly, the tale differs depending on who’s telling it.

Some basic, undisputed facts: Sometime this spring, TipJoy, a year old start-up that lets Web surfers “tip” bloggers and publishers, shopped the service to multiple parties, including Twitter and Facebook. By July, Facebook had offered, via a term sheet, to buy the company. Facebook then pulled its offer, and shortly after, offered Ivan a job. Now he and his wife are shutting TipJoy down and returning what’s left of the $1 million they had raised to their investors.

Also undisputed: No one has accused anyone of violating any laws, or contracts. Facebook’s offer was nonbinding and nonexclusive. And it’s not unheard of for companies to walk away from an M&A deal late in the process. That’s what happened, for instance, when Google (GOOG) bailed out after deep talks with Digg a year ago.

You could see why some of TipJoy’s backers, which include BetaWorks, the Accelerator Group, ex-Googler Chris Sacca and the Y Combinator start-up factory, might cry  foul. The argument would be that Facebook’s actions effectively prevented the company from finding another buyer. But even if that was true, it doesn’t mean that Ivan Kirigin had to accept Facebook’s job offer and/or shutter his company.

Facebook spokesman Larry Yu declined to discuss the negotiations in detail, but offered this statement via email: “We take pride in operating in a transparent and ethical manner. We can’t offer any specifics here, but to suggest anything untoward occurred on our part simply ignores the facts.”

I’ve sent the Kirigins repeated requests for comment but haven’t heard back. Their statement announcing the decision to close their company doesn’t mention Ivan’s new job. But it does hint, obliquely, at their future plans:

When we evaluate why there’s been so much hype about payments on Twitter, and yet so little traction for us (and even far less for our competitors) it is clear to us that the reason is that a 3rd party payment service doesn’t add enough value. We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party….the only way to get around this is for the platforms themselves to control payments–then all people wanting to operate on that platform would have to play along. We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success.

UPDATE: Y Combinator founder Paul Graham, commenting on this story on his Hacker News site, says Facebook hired Ivan at his urging:

Facebook didn’t do anything wrong. Tipjoy was out of money. They’d been talking to several potential acquirers, including Facebook, but those deals all fell through. So the Tipjoys were going to have to get jobs somewhere. Since they were worried about money and Ivan admired the hackers at Facebook, I asked FB if they’d offer him a job, and they did.

It doesn’t portend anything for the future of startups, as this story seems to imply. If your startup tanks, you have to get a job somewhere, and lots of hackers get jobs at Facebook. There are several other YC alumni working there.

Ivan Kirigin also weighs in within the same comments section, and says that my report “completely doesn’t tell the whole story.” Ivan, I’m all ears, so either drop me a line or leave a comment below.

Note: I’m assuming that the commenters identifying themselves as Paul Graham and Ivan Kirigin in the comments section are indeed Paul Graham and Ivan Kirigin. But I’ve sent emails to both men so I can verify that. Update: That is indeed Paul Graham.

“No,” he said. “I bet on the hockey stick.”

That is, he was looking at Twitter’s staggering month-over-month growth–which looks like a hockey stick when you plot it on a graph–and assuming that any company that moved that fast had to be worth something, eventually.

That kind of thinking is common during bubbles, and much less so after they burst. But in this case, betting on Twitter’s hockey stick looks like a good wager–especially if you made your bet prior to this year. Because this is what the hockey stick looks like now (click to enlarge):

And note that the chart just illustrates U.S. traffic to Twitter, which comScore (SCOR) pegs at 9.3 million unique visitors in March, up 131 percent from February. Factor in international users, and those who use Twitter but never visit the site, and you get to 20 million easily.

I’m going to write many more stories about Twitter (a phenomenon that is itself part of the Twitter story) so we can try to assess exactly what that growth means, whether it makes sense for Google (GOOG) or Microsoft (MSFT) to do a search deal and what Twitter is really worth, later. But unless the Twitter guys really make a hash out of this, my anonymous investor is going to be right: That hockey stick is going to be worth something to someone.

Side note: As popular as Twitter is, most people are still new to it. So here’s a tip: If you don’t want the general public to know that you and many of your coworkers got laid off today, don’t Twitter about it.

[Image credit: Mykel Roventine]

No terms were disclosed. The settlement, in conjunction with an earlier deal struck with Sony’s Sony Music Entertainment (SNE), means that Project Playlist now has deals with two of the big four music labels. But Warner Music Group (WMG) and Vivendi’s Universal Music Group are still suing the company.

Just as important: Project Playlist hasn’t been reinstated by MySpace and Facebook, both of which booted the service off their social networks last November. Since Project Playlist depended on those sites to drive traffic to its site, it’s hard to see how it can gain much traction unless it can sweet-talk the two other labels into coming aboard.

My expectation was that a settlement was in the works last fall because that’s when former Facebook COO Owen Van Natta joined the company as CEO and investor Bob Pittman poured several millions of dollars into it. Neither of those men, I assumed, was betting on a prolonged lawsuit.

Project Playlist isn’t the only music start-up struggling these days–even those that haven’t been sued by the labels, or have deals with them or even investments from them, are trying to figure out how to survive. Most assumed they’d be able to make money via advertising, but that was a hard sell even before the recession/depression.

Still, better to have a deal than a lawsuit.

Preprepared quotes from both sides:

Van Natta: “It is crucial for us to continue connecting our users with more of their favorite music. This partnership will provide us with a wide-ranging selection of content to satisfy our users’ appetites to share and purchase music. We are excited to now have both EMI and SONY BMG Music catalogs available and we hope to continue to expand and enhance our service.”

Ronn Werre, EMI Music’s President, Music Services worldwide: “Making our music available on a fan favorite like Project Playlist is part of EMI Music’s mission to connect artists and fans and to give fans more ways to discover new artists. Project Playlist is becoming a fan favorite. Our artists also know that word-of-mouth among friends is a powerful part of music discovery.”

To get this out of the way: Turner says he and everyone else who was in his office, near Rittenhouse Square in Philadelphia’s Center City district, is OK. So the story, which kicks off just before 9 p.m., has a happy ending.

8:55pm “Fire at the office. Holy f–k.”

9:01 “Electrical fire.”

9:06 “Everyone’s ok. Smoke everywhere.”

9:15 “Holy crap. This is an actual fire. The piano store next to us is fully engulfed in smoke. Dozens of firetrucks. Crowd gathering.”

9:18 “They just broke down all of the windows.”

9:50 “They just broke the floor down. Flames everywhere. 17th and chestnut. I really hope they play my 911 call.”

10:57 “Can’t go back in the building. Everyones ok. Our floor may have lucked out.”

The upshot, Turner writes via email: “The first floor is gone. We are on the 3rd.”

There’s more documentation now up at Turner’s Flickr stream, which seems to indicate that he and his co-workers didn’t spend much time in the building while it was ablaze. So that’s good. But one of these days, one of these “I’m Twittering live from the scene of something hair-raising or worse” incidents isn’t going to end well. Glad this one did.

Turner, by the way, got his undergrad degree from Penn last year. And his company, funded by First Round Capital and Genacast Ventures, is doing some interesting work with ad exchanges–much headier stuff then your prototypcial Web 2.0 start-up. They’ve been more or less in stealth mode up until now, but that may be harder to pull off in the future.

1. Things are brutal! We’re about to see companies falling like flies this year as they run out of money. And those that are able to get money are getting it on terrible terms.
2. Things are great! We’re about to see companies falling like flies this year as they run out of money. Which means that the remaining ones will be worth investing in–at reasonable valuations.

Put Mark Cuban in the second camp. More or less: The billionaire investor claims he’s never been that interested in valuations, period–just whether or not the companies he’s looking at can make money.

The SEC might argue with that, but Cuban didn’t talk to me about that when I saw him last week at the Consumer Electronics Show, where he was promoting a live 3-D broadcast of the BCS college football championship.

He did explain his start-up investing philosophy, though. Key takeaway–if you’re pitching Cuban for an investment, don’t tell him that you plan on flipping your company.

Bonus advice from Cuban, who prominently posts his email address everywhere he can, and consequently gets 500 to 5,000 emails a day: How to manage a full inbox using Gmail and a Sidekick. He’s got some (off-color) advice for Google (GOOG) CEO Eric Schmidt, by the way: That kicks in around the 3:30 mark, if you’re interested.

• A very successful angel investor, who conveyed this logic to me this morning from the confines of a very, very nice Manhattan apartment (I’ve only seen views of Central Park like that from an airplane).
• Or Björk, the Icelandic sort-of popstar.

More info on the latter: Björk has announced the creation of a new venture fund, named…BJÖRK.

It is “intended for investors seeking investment opportunities in new venture creation and the business development of small companies with the objective of catalyzing the recovery of the Icelandic economy,” and will invest in companies “that create value through the uniqueness of Iceland’s nature and culture,” according to Audur Capital, an Icelandic financial services company that will manage the fund.

It’s not clear whether Björk has contributed anything to the fund beyond her name. Audur is putting up the initial seed investment of 100 million Icelandic kronur, which these days is the equivalent of $826,000. Audur describes itself thusly: “We are aware of risk and social responsibility, and we are unafraid to put feminine values into finance…. If you are looking for an investor or an advisor who can bring not just financial capital, but also emotional capital, we may be just your partner.”

[Image Credit: The TripWireNYC]

Newest example: StockTwits, a Twitter-based bulletin board/chat room for individual investors. The company has raised more than $800,000 from a big group of angels that includes Roger Ehrenberg and Howard Lindzon (disclosure: Ehrenberg and Lindzon invested in my previous employer). Ehrenberg has provided a long list of investors at his blog; other notable names include Betaworks, the New York-based start-up investment company, and Todd Stottlemyre, the former Toronto Blue Jays pitcher turned investor and Twitterer.

The idea is fairly simple: Users toss off quick thoughts about trades, companies, markets, etc., using “$” or “$$” signs to identify their messages as StockTwits. The site compiles and sorts them, and will eventually start ranking users based on their following, track record, etc. The service is free, but will try to upsell users with premium products like research, etc.

You could do all this without Twitter, if you wanted to. But the service is perfect for the rapid-fire bursts of text/thought that a certain breed of investor treasures. And, of course, Twitter does all the heavy lifting for free, so why not build a business off its back?

Twitter isn’t the only Web 2.0 business to let other people build services based on its API, of course. It’s standard practice for everyone from Google (GOOG) to Facebook. But usually those businesses benefit because users end up more closely tied to their core businesses, which… is a business of some sort. Since Twitter has yet to actually generate any business, it’s just a giveaway.

That could change sooner than later: Twitter is hiring a “Business Product Manager” who is supposed to “lead the definition and execution of the products and features that will lead to monetization of the Twitter platform.” Perhaps step one will be a phone call to StockTwits and the other members of the Twitter ecosystem.

Kelly’s number for today “may be on the high side,” a person familiar with the matter counsels me. In any event, I expect to have more details later in the day. As always, I value your input, and I keep all correspondence anonymous: peter@allthingsd.com.

In the meantime, an update on this week’s cuts: I’m told Time Europe editor William Green and senior editor James Graff were laid off via phone yesterday, and that more cuts in the London office are expected today. And four-year-old Cottage Living magazine has been shut down, which means that 38 out of 47 people who worked on that title are out of work; the remainder will be placed elsewhere in the group. Announced along with the job cuts today were the departures of executives from Cooking Light and Southern Progress. Chris Allen, Senior Vice President and Publisher of Cooking Light is resigning his position, as are Southern Progress execs Bruce Akin, Karla Hardy and Dick Gardner. Here are the memos:

November 18, 2008

To:Time Inc. Employees
From:Sylvia Auton
Re: Cottage Living Magazine

I regret to inform you that we will no longer be producing Cottage Living magazine. The November/December 2008 issue, on newsstands now, will be the magazine’s last. Cottageliving.com will also shutdown. However, the company will keep the brand alive in one of its other leading shelter titles and these plans will be finalized over the next few weeks.

Since its inception, Cottage Living attracted significant advertiser support and fostered a loyal following among readers. However, the economic downturn has particularly affected the shelter market and while the brand was genuinely loved by readers and advertisers alike, the economy inhibited its ability to grow and therefore, sadly, we had to make the decision to close it.

Cottage Living launched with a unique editorial mission. Its readership celebrated community and character over conformity, personality rather than perfection, and informality instead of pretension. The brand’s tagline: ‘life just right,’ showed how one could ‘live large,’ even luxuriously, in a lighter footprint.

Launched in September 2004 with a circulation of 500,000, the brand quickly grew to 650,000 in January/February 2005. One year later, Cottage Living increased its rate base to 900,000, and then to one million in January/February 2007. Cottage Living also produced many one-time special-interest publications including Cottage Christmas and Cottage Makeovers.

Cottage Living also received many industry accolades including AdWeek’s ‘2005 Startup of the Year’ and Advertising Age’s ‘2005 Launch Worth Watching.’ It was also named to AdWeek’s ‘Hot List’ 10 Under 50 list for two consecutive years: 2006 and 2007.

I want to thank the many dedicated and talented Cottage Living staffers. It was developed, edited and published by some of the best talent in the business and we can remain proud of its many achievements.

S.A.”

Subject: Staff Announcement
To:       Lifestyle Business Unit Employees
From:   Sylvia Auton and Steve Sachs
Re:       Staff Announcement  

With the departure of Bruce Akin, we’re pleased to announce that Bruce Larson will assume the role of Senior Vice President and the lead executive in charge of SPC operations for Time Inc. He will be responsible for the general management of all operations in the Birmingham office, Oxmoor House and Southern Living at HOME.

Bruce joined the company in 1991 as a manager of corporate reporting. Over the last 17 years he has been promoted numerous times and has held jobs in a variety of areas, from corporate accounting to IT to consumer marketing and production.

During his tenure with Southern Progress, Bruce has shown outstanding decision-making and leadership skills and has been a key player responsible for the strong financial growth the company has enjoyed over the years.

Please join us in congratulating Bruce on his new assignment.”

To:  Southern Progress Colleagues
From:  Bruce Larson

I regret to announce that two longtime, trusted Southern Progress colleagues, Karla Hardy and Dick Gardner, have decided to retire at the end of the year.

Karla has been a steady presence in our advertising production circles ever since she joined the company in 1977 as advertising traffic manager for Progressive Farmer. In 1985, she accepted a position as assistant to the editor and advertising/production coordinator for Southern Living Classics, which merged later that year with the newly acquired Southern Accents, where she eventually moved up to advertising production manager. When we launched Coastal Living, Karla began working on both titles, and in 2007 she began helping manage advertising production for Cottage Living as well. And let’s not forget her work on Entrée. With her incredible depth of knowledge of advertising production and her keen eye for detail, it’s no wonder that Karla is so highly regarded. She knows how to best position each ad for space efficiency and visibility, and she knows how to work with our sales staff and advertisers to ensure that everyone is happy with the outcome.

Dick began his Southern Progress career just nine months after Karla, back in 1978. He spent the first 13 years of his SPC career on the corporate side, managing building operations, office services, and purchasing, before moving to the magazine side of the business as financial manager for Southern Living and Southern Accents. In 1995, he was named general manager of Southern Accents. One short year later, he added responsibility for the soon-to-be-launched Coastal Living. In 2004, he was named vice president and general manager for Coastal Living alone, and in 2007 he took on the GM role for Cottage Living as well. Dick is well respected for his wisdom, leadership. and kindness, not to mention his astute business sense. He knows his titles—and his staff—inside and out and never fails to find the right solution to any challenge. Plus, he has a great sense of humor.

There have been several times over the years when both Dick and Karla have been counted on to work on more than one title—a sure sign of how highly they’re valued around here—and each did so while managing to maintain a positive, calm outlook. Please join me in thanking them for all they’ve done for us and letting them know how much they’ll be missed.”

Subject: Staff Announcement
To: Lifestyle Business Unit Employees
From:  Sylvia Auton
Re:  Staff Announcement

After careful consideration, Chris Allen, Senior Vice President and Publisher of Cooking Light, has decided to leave the company.

A 26-year veteran, Chris first joined Cooking Light in 1991 as eastern advertising sales director and quickly rose through the ranks. Chris’ leadership and expertise resulted in enormous successes for the Cooking Light brand: Under his direction, Cooking Light has grown to become the world’s largest epicurean and healthy lifestyle magazine.

During his tenure, Cooking Light was named to AdWeek’s Hot List four times, Advertising Age’s ‘A List,’ Capell’s Circulation Report’s prestigious ‘Triple Play Award’ three times, and ‘Most Notable Launch of the Past 20 Years’ awarded by Media Industry Newsletter and Samir Husni in 2005. Chris also presided over the launch of several groundbreaking marketing campaigns, including The Cooking Light Cruise, the Cooking Light Fit House, and Cooking Light Supper Clubs.

An avid cook and exercise enthusiast, Chris lived the Cooking Light brand. He’s also a rock star: The Cooking Light band, Way Past Close, has performed throughout New York City and Birmingham to clients and colleagues.

Earlier in his career, Chris spent eight years at PEOPLE rising from salesperson to New York divisional sales manager.

Please join me in thanking Chris for his many contributions to Southern Progress and Time Inc. and wishing him the very best.”