AOL sells Bebo website for knockdown price
AOL today sold social networking site Bebo, just two years after buying it for $850 million (£574 million) in one of the worst deals of the internet age.
The sale price was not disclosed but it was rumoured that buyer Criterion Capital Partners paid just $10 million or even less in a major embarrassment to AOL.
Bebo founder Michael Birch, a Briton, must be glad he sold when he did. He made $300 million when he flogged the loss-making business to AOL in 2008.
AOL has been trying to streamline operations since being spun off from Time Warner last year. It has been struggling with a declining internet access business and weak advertising revenue.
Bebo, founded in San Francisco, gained popularity in the UK but never won over American web users, and has been losing users to competitors such as Facebook and Twitter.
In April AOL described Bebo as a business in decline and requiring significant investment which it was not in a position to provide.
Social neworking has proved impossible for most to make money as users prove fickle and unwilling to put up with advertising. News Corporation's MySpace is also suffering from lower advertising revenues and customer numbers although Facebook claims to be "cashflow positive".
Criterion Capital Partners' managing partner Adam Levin, who led the acquisition, said Bebo was an attractive media site thanks to its "young, highly active user base, revenue history, presence in countries throughout the world and solid technical infrastructure".
