AOL brass frankly embarrassed by Bebo buy

Why were AOL CEO Randy Falco and COO Ron Grant so secretive about buying Bebo? Because they knew much of AOL management hated the deal, Silicon Alley Insider reports. Executives from AOL subsidiaries Advertising.com, Platform A and Userplane would all have worked to kibosh the $850 million deal if they'd known more about it, so Falco and Grant kept them out of the loop. Supposedly, Grant and Falco pushed ahead with the deal because they think Bebo makes AOL a more attractive acquisition target. One source called the buy "Grant's last stand." Below, SAI's account of precisely what's to hate about Bebo, according to AOL execs.

An inability for AOL to monetize more social-networking inventory. According to our sources, AOL's Advertising.com already cannot monetize all the MySpace (NWS) and Facebook inventory it has available.
Flattening traffic growth at Bebo, which contributes to a sense that AOL is buying it at the peak.
A 3X difference between the revenue assumptions used to justify the deal to Time Warner's corporate team and the revenue assumptions some AOL senior managers thought were reasonable.
Belief that the Bebo founders would bolt the moment the check cleared.

1:00 PM on Thu Mar 20 2008
By Nicholas Carlson
1,841 views
8 comments

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Alaska Miller at 01:23 PM on 03/20/08
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Randy Falco is the walking definition of frigtard.
yawnster at 01:31 PM on 03/20/08
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i wonder how much money the 2 idiots will get when they get fired while the rest of the workforce die burning.
migukin at 02:11 PM on 03/20/08
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AOL's fate is very, very interesting. The most logical thing now would be for Google to buy it. Facebook would be another good fit (once AOL was spun off, obviously.)

But.

They seem to be moving as fast as possible to make the need for that moot.
Valleygrrl at 02:24 PM on 03/20/08
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Nice. Gotta love a CEO slamming his own people, only so he can line his own pockets in the upcoming sale.

AOL deserved to die many years ago. But from the people I have known who worked there, it's a competitive, backstabbing pit of despair.
Alaska Miller at 02:28 PM on 03/20/08
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@migukin:

lol facebook and aol lol
Tiltawhorl at 03:02 PM on 03/20/08
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David Colburn, where have you gone? You might still be well-hated, but I bet you woulda hammered out a deal where Bebo would pay *AOL* $900 million in cash and preferred stock in order to be acquired.. and Falco would be fetching you coffee.
Fidel on the Roof at 03:25 PM on 03/20/08
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@Alaska Miller: Ha! They should buy bankruptcy insurance.
eze at 10:23 PM on 03/20/08
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i think what happens to companies this far behind is that they go out of business. their healthy units go to the winners. guess what aren't some of the healthy units.