Upon selling Bebo to AOL, it was reported that the Birch’s took home a generous profit of $595 million dollars. This purchase by AOL would go on to be known as one of the worst decisions made in the dotcom era.
Failed Funding This sale occurred during the midst of the financial crisis, which would prevent AOL from properly funding Bebo’s operations leading to its downturn. There simply were not enough advertising sales and funding to keep the social networking site up to speed with Facebook.
Overshadowed Although Bebo and Facebook provide very similar features , Facebookhad already established itself as the dominant site and Bebo began to get little exposure.
Similarities Facebook What’s on your mind? Comments Top Stories Share Videos Share Music Share Pictures Bebo Say it! Comments Top Stories Share Videos Share Music Share Pictures
Similarities Facebook Personal Profile News Feed Messaging Inbox Chat Games Link account to Bebo Bebo Personal Profile News Feed Messaging Inbox Chat Games Link account to Facebook
As you can see, Bebo and Facebook are essentially the same social networking sites which just happened to be marketed differently.
Due to a better marketing strategy, Facebook members now span worldwide with over 200 million users. Bebo, on the other hand, still had some more selling to do due to a continuous lack of users.
Massive Losses In June of 2010, AOL announced they would have to sell or shut down Bebo. The social networking site was then purchased by Criterion Capital Partners, a hedge fund firm.
Remember how AOL reportedly paid $580 million for Bebo?
They sold it to Criterion Capital Partners for around $10 million. That’s a minimal loss of $570 million for AOL!
The massive financial losses incurred by AOL due to Bebo’s failure would cost then CEO Randy Falco his job.
Reviving an Image Under the new leadership of Criterion, Bebo has received a much needed home page and profile page make-over. Bebo is also expected to release an updated cell phone app later in 2011 to re-tap the mobile market.
Future The future of Bebo is still uncertain, but with new leadership in place and a new marketing strategy there is a chance the social networking site can find new life.