Bebo faces axe after user numbers plunge
Another fine AOL mess
By John E. Dunn | Techworld | Published: 10:30, 07 April 2010
Only two years after buying Bebo for $850 million (£450 million at 2008 exchange rates), AOL could be about to shutter the social network everyone has heard of but few seem to use.
The news emerged from a stark email sent to the social network's dwindling 40-strong band of employees by AOL's acquisition head, Jon Brod, which makes clear that the company no longer has the cash to keep investing in Bebo to battle much larger rivals.
"As we evaluate our portfolio of brands against our strategy, it is clear that social networking is a space with heavy competition, and where scale defines success," wrote Brod.
"Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space. AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking."
Officially, the UK-born company could be sold, but falling that the possibility of it being shut down appears to be a serious alternative.
Bebo's problems are complex. The site has a following in the UK, but has failed to translate that into the social networking monoculture of the US, where Facebook is hugely dominant. It was also bought by AOL (then part of Time Warner), a company that has become one of the Internet era's greatest success-to-failure companies. Ever troubled, AOL looks to be incapable of reinventing itself.
Bebo has gone from 40 million users at the time of its acquisition in May 2008 to today's figure of only 12 million. That alone guarantees that if AOL is able to sell the site it will raise only a small fraction of what it paid.
