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Rory Cellan-Jones

Bebo is bought

  • Rory Cellan-Jones
  • 13 Mar 08, 13:09 GMT

Rumours that the social network Bebo would be swallowed up by someone have been swirling around for at least a year. Google, Yahoo, MySpace and Viacom have all been names as potential suitors. Now the truth is out – and it's AOL which has picked up the prize for $850m.

Rory Cellan-Jones and Michael and Xochi BirchLast year, while compiling a piece about social networks for Radio 4, I met Bebo’s founders, Michael and Xochi Birch. They’re a charming Anglo-American couple who have managed to combine bringing up a family with starting a fast-growing business in California. In my interview with them, they first dismissed the latest rumour that they were about to sell up, then very charitably agreed to be my Bebo friends – I’d explained that nobody seemed to want to know me.

Anyway, I can’t say that our social networking relationship has been very close – I have to confess I spend more of my time on a rival network – but I have watched their progress with interest ever since. The first hint that they might not be as averse to a sale as they claimed was when they hired a senior Google executive Joanna Shields. She was named president rather than chief executive, but always gave the impression that she was running the show and turning it into a more professional outfit.

While Facebook made all the media noise last year, Bebo was in some ways more innovative. It recognised the potential of video, introducing its own interactive TV soap opera katemodern, and striking deal with broadcasters to bring their content to the site.

But its problem has been that it has remained a “starter” social network – hugely popular in schools (where some teachers have sought to ban it) but not really graduating to older users. How attractive this population is to advertisers isn’t clear – especially at a time when companies are beginning to look just a little more sceptically at the potential of social networking.

So Michael and Xochi Birch may have sold out just in time. While their share of that $850m makes them very rich indeed, it is another reminder that Facebook isn’t really worth $15bn. That valuation – implicit in the price Microsoft paid for a tiny stake last year – puts a price of $250 on each of Facebook’s 60 million users. Bebo has just sold each of its 40 million users for a rather more modest $21.50 per head.

I have sent a couple of messages to my Bebo friends Michael and Xochi over recent weeks, asking them if rumours of an impending sale were true. Unsurprisingly, they decided not to share that information with me in advance. But Michael, Xochi – if you’re listening get in touch – and tell the BBC what your Bebo users can now expect from this change of ownership.

UPDATE
In the conference call after the deal was announced one AOL boss promised to "supercharge the monetisation of Bebo." I wonder if that message will be passed on to users?

Comments

I just hope that AOL don't make too many changes to Bebo or they may lose people to other networks like Facebook!

  • 2.
  • At 09:36 PM on 13 Mar 2008,
  • Tim wrote:

I only joined Bebo to watch KateModern and still only use it for that. I wonder if AOL will change anything about the show? I hope not!

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