AOL Buys Bebo for $850 Million

Posted on March 13, 2008

AOL has purchased the Bebo social network for $850 million. They made the announcement today in a press release. They claim Bebo has 40 million members worldwide.

With a total membership of more than 40 million worldwide, Bebo is a global social media network which combines community, self-expression and entertainment to enable its users to consume, create, discover and share content. Bebo is one of the leading social networks in the UK, and is ranked number one in Ireland and New Zealand, and number three in the U.S. Its users are heavily engaged and view an average of 78 pages per usage day. Bebo has approximately 100 employees operating in offices in the UK, San Francisco and Austin, TX.
The deal comes just one week after AOL's launch of Open AIM 2.0, an initiative that allows the developer community greater freedom to access the AIM network and integrate AIM into its sites and applications, and the announcement by Apple of a downloadable AIM application for the iPhone.
Under the terms of the agreement, AOL will acquire Bebo for $850 million in cash.
"Bebo is the perfect complement to AOL's personal communications network and puts us in a leading position in social media," said Randy Falco, Chairman and CEO, AOL. "What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web, and the monetization opportunities that leverage Platform-A across our combined global audience. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers."
"AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks," said Bebo President, Joanna Shields. "With one and the same vision in this area, it was a natural progression for Bebo to join AOL, and we look forward to working together to continue to expand the online social experience globally."

Like other social networks Bebo offers a combination of profiles and photo and video sharing. They also have thousands of applications. Past rumors have valuated Bebo at around $1 billion to $1.5 billion. They came pretty close to that with this $850 million sale.

Larry Dignan at Between the Lines sees this as the start of a social networking consolidation round.

As for the rest of the field, AOL's purchase of Bebo is likely to set off a round of consolidation among smaller players that would be fine tuck-in deals in a larger setting.
With Bebo off the table sites like Ning and LinkedIn have just become more valuable-especially to a company like Yahoo, which appears to be left out of the social networking party.

There are others still out there that the big Internet players could snag like Friendster.com, hi5 and myyearbook.com. MyYearBook.com recently claimed to be the fourth largest U.S. social network - ahead of Bebo.

Photo: AOL