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 3/10 Fair --- newsquake.netscape.com http://newsquake.netscape.com/rss.xml
Wednesday, May 14, 2008 --- 72 days ago http://newsquake.netscape.com/2008/05/07/how-bebo-fits-into-aols-strategy/
| When AOL announced in March that it would acquire social-networking service Bebo for $850 million, there was a collective gasp from those watching the company. At the time, news headlines bluntly suggested that the flailing corporation could be spun off into parts ( Variety : "AOL Seeks Reinvention") or suggested a Yahoo-AOL joint venture. While social media sites are all the rage (just last week, LinkedIn valued itself at $1 billion), no one expected AOL to gobble up the third-largest social networking service in the U.S., which trails only MySpace and Facebook. An acronym of the phrase "Blog early, blog often," Bebo was founded in 2005 by a San Francisco-based husband and wife team, Michael and Xochi Birch. The site remains more popular in Europe than in America, but as analysts saw it, AOL was wise to focus on a younger audience (and to acquire a venue that might bring in substantial advertising dollars). Anthony Valencia, an analyst for TCW Group in Los Angeles, told the Los Angeles Times that "AOL was in danger of becoming your father's Oldsmobile. This acquisition is designed to prevent that." But how would Bebo fit into AOL's larger strategy? At the Economics of Social Media conference, held at Los Angeles' Skirball Center earlier this month, AOL President and COO Ron Grant addressed that very question, albeit in rather vague terms. "About 14 months ago, we took a look at the space," Grant told the 400-plus attendees at ... |
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