Is Bebo really worthless?

Michael and Xochi BirchThe
sale of Bebo announced this morning has been a long time coming. It
started coming almost as soon as AOL bought the site and it started to
lose ground in March 2008.

 

As long ago as January 2009 there was talk that Bebo was worth as little as $200m less
than a year after AOL had bought it for a whopping $850m (£417m). At
the time Bebo spokespersons called the rumours “ridiculous”.

 

It turns out they were just talking about the bigwigs at AOL who
failed to act sooner to offload the site while it was still worth
something.

 

The problem is (at least one of the problems is) that AOL overpaid
handsomely for what was a late entrant into the social networking
market that always trailed the market leader and um now really trails
them.

 

As Brand Republic reported this morning Bebo is so far behind its rivals that its like a niche site…but that isn’t what it is supposed to be.

 

ComScore says Bebo’s global unique visitors in February totalled
12.8 million, which was down 45% on February 2009. Facebook had 462
million visitors, MySpace nearly 110 million, and Twitter 69.5 million.

 

Bebo could fit 36 times into Facebook. Vin Diesel has 7.7 million
fans and Barrack Obama has 8 million. Together they are bigger than
Bebo.

 

Its rate of decline is so steep that by the time someone makes a
bid it will have lost thousand so more users many of whom are simply
not using the site all that regularly. I know this as clearly they are
all on Facebook with everyone else.

 

AOL bosses apparently fell for the charms of Joanna Shields, the
then chief executive of Bebo (apparently she is charming) and later
Jeff Bewkes, Time Warner’s CEO admitted that the company had overpaid.

 

Still on the plus Shields got a job at Facebook and
site founders Michael and Xochi Birch have some mansion in San
Francisco and can afford lots of black clothes. Plus nice chairs. For
AOL there’s no plus.

 

Anyone who buys Bebo as AOL continues to refocus its efforts on its content business
will do so for very little and face the prospect that even paying a
little (and nowhere near last year’s $200m) could be too much for a
site leaking users at an alarming rate.

 

It is a shame as in many ways Bebo broke new ground. There was a
time when it was a much talked about destination for original content
with online shows like ‘Kate Modern’ and ‘Sofia’s Diary’, which was bought by terrestrial UK channel Five. All that along with the people who watched are now pretty much gone. Still someone loves it they’ve launched a campaign to save it. Good luck with that one.

 

[Twitter]

  • Vincent Voyd

    Bebo was pretty innovative and produced some interesting video content. However the fragrant Ms Shields seemed able to convince agencies and M&A execs that Bebo had invented a new model for advertising. It hadn’t. Behind the hype about product placement, Bebo was a fairly standard media-buy. It’s easy to mock AOL for not spotting this, but I think we all wanted to believe the hype!

  • Rupert Bright

    What great timing for Joanna Shields, the issue is the gap between those at AOL who hold the purse strings and those who deliver the product. Were Bebo ever truly able to compete?

Latest jobs Jobs web feed