Valleywag
AOL CEO Randy Falco just announced to employees that AOL will buy the social network Bebo. News.com reports AOL paid $850 million. In the memo, Falco claims the acquisition "puts us squarely in a leading position in social media at a time when it's growing at a fantastic rate." Incorrect. We may not know what "social media" means, but we know how to define "leading." And the only thing Bebo leads in is down time. As of February 26, Bebo led all social networks with 12 hours and 28 minutes of down time since the beginning of 2008. Here's Falco's delusional memo in full.
Dear colleagues,
I've said many times that my vision for AOL is that we become a global, market-leading ad-supported digital media company. Today, we're taking a major step toward realizing this ambition.
We're announcing plans to acquire Bebo, a leading global social media network founded in 2005 that has a worldwide membership of 40 million.
This acquisition is game changing for AOL for a number of reasons. It puts us squarely in a leading position in social media at a time when it's growing at a fantastic rate. It will help power our strategic priorities across the board. And, just as important, by acquiring Bebo we can reclaim our heritage as a leader and innovator in the online community space.
Bebo is a true pioneer of the social Web. And, as a result, it has the most engaged audience and has seen tremendous growth - it's one of the leading social networks in the UK, ranked No. 1 in Ireland and New Zealand, and No. 3 in the U.S. With our AIM and ICQ networks, we will have a powerhouse reaching about 80 million unique users worldwide. Few other social networks can claim that reach.
And by bringing Bebo into the AOL family, under the continued leadership of its President Joanna Shields, we'll be able to accelerate its growth in the U.S., serving consumers here who are looking for the kind of superior social media experience Bebo provides. At the same time, the acquisition will provide us new opportunities to monetize a wider, more global, more deeply engaged audience through Platform-A. (You can read more about the acquisition here.)
In the past year, we've made great strides transforming AOL, through new product and programming launches and upgrades, our rapid international expansion and the creation of Platform-A. The Bebo acquisition, which we expect to close in the next month, supports all these efforts, and puts us in the game in the very important social media arena.
Please join me in congratulating everyone involved in this acquisition.
Randy
Comments
Once again a day late, a dollar short and a poor application behind the competition. AOL will never learn. Facebook or Myspace would have been a major acquisition but bebo? who even uses bebo?
Birch couldn't have timed it better........ sign a load of media deals, product placements and then cash out.
Don't even know why aol bought it.... its only popular in the UK... and the users are just a load of poor chav pikeys. Not exactly the best audience for any advertiser.
This deal makes the valuation of FB look more and more realistic :)
exuberant!
So Hometown went all to hell. Love@aol was sold off. Then profiles weren't properly exploited. Then AIMSpace/AIMPages/AIM Profiles. Then the purchase of a no-name Social Networking site for another $850 of Time Warner shareholder money. There will be no proper integration and layoffs of the few valued people left in the space at AOL, and it'll all fail anyway because social networking has about 12 months to live. I'm happy that I pulled my dough out of TWX and shoved it into russian spyware firms.
Whats Bebo?
@mandarin: What's AOL?
@JDone: Vhy do I vant a fuckin Facebook that's got no fuckin vheels?
JDone - FYI - Bebo is not just used by the UK and it may have its share of Chav's, but like any other social network its home to many different types of people. I am from Ireland and bebo is No. 1 here as it is in New Zealand. I know everyone is entitled to an opinion - but if your going to make yours public at least have the facts!
Only yanks are esxceptionally delusional about the "value" of online poking sites like facebook, and they are so provincial they have little to no knowledge of the big websites outside the US. Bebo is pretty popular, but $850m still overvalues it. But this just makes FB's alleged $15b valuation even more ridiculous. And JDone's right - most of the online demographic for these sites are class-challenged, both in the US and in the UK, which means their advertising potential is crap, except for custom rims and wifebeater shirts.
Via Wikipedia:
1. MySpace General. Popular Worldwide. 115,000,000 Open to people 14 and older.
2. orkut Owned by Google. Popular in Brazil and India. 109,000,000 Open to people 18 and older
3. Facebook General. Popular in Canada, UK, USA, Australia and New Zealand. 97,800,000 Open to people 13 and older.
4. Habbo General. Over 31 communities worldwide. Chat Room and user profiles. 86,000,000 Open to people 13 and older
5. hi5 General. Latin American and Asian teens. Popular in Cyprus and Romania. 70,000,000 Open Friendster General. Popular in Southeast Asia. 58,000,000Open to people 16 and older.
6. Classmates.com School, college, work and the military 40,000,000 Open
7. Windows Live Spaces Blogging (formerly MSN Spaces) 40,000,000 Open
8. Xanga Blogs and "metro" areas 40,000,000 Open
9. Flixster Movies 36,000,000 Open
10. Netlog Formerly known as Facebox. 32,402,580 Open
11. Tagged.com General 30,000,000 Open
12. Reunion.com Locating friends and family, keeping in touch 28,000,000 Open
13. iLike Music, Video, Photos, Blogs 25,000,000 Open
14. Bebo General, Popular in UK, Ireland, New Zealand and the Pacific Islands 21,300,000 Open to people 13 and over
They are the type of demographic I'd pay to avoid.... just look what happened to Burberry.
Bebo is enjoyable to use. Is it worth what AOL paid for it? Hell no!
Paying that much for a mailing list is stupid and short-sighted.
Unforunately, this will help the MSFTs of the world think fb IS worth anything close to a million dollars.
It is a mailing list people... with a 1% response rate if that. It is a shitty list.
note to the bebo employees... aol has just given you a golden parachute...time to jump out of the plane with it cuz its about to crash.
Orkut is arguably a better advertising platform than Facebook, and probably MySpace too. South American countries from my (admittedly limited) experience don't have a heavy turnover on "trendy" sites like we do in the Western world, and in India Orkut is used partially for professional networking.
Which is to say, the Google social networking site no one cares about probably has more affluent users when normalized for currency disparities, making it the largest non-search engine website where I'd imagine advertising is actually worthwhile.
Maybe I'm the only one that sees the humor in this, I don't know. AOL and Yahoo just seem incapable of getting in front of anyone.
their vc took out 150 mil, bebo has 100 employees so that leaves 7 million per employee on average. better get whatever you can get and buy an island somewhere before your dollar devalues to nothing and your paper wealth is wiped.
falco, as it turns out, is just a bumbling old media fart trying to match wits with new kids. better luck tomorrow, old man.
I just realized that they bought this in dollars, which means Bebo got 420mil-ish. Maybe it's a leading position if you get a website for 580 million less than their ridiculous self-valuation?
Here's the AOL-Bebo cheer:
"We're No. One"
"We're No. One"
"We're No. One"
We're No one.
Ooops.
@eire01: Evidence of the 'ol glazzies:
West Staines Massive
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