AOL Acquires Bebo for $850 Million
Posted: March 17th, 2008
AOL’s $850 million (cash) acquisition of the Bebo social networking site comes to surprise for many, despite rumours that Bebo was looking for a buyer. After all, rumours of mergers and acquisitions fly around the Internet everyday. Bebo had however already partnered with AOL in integrating the AIM messenger client with its service.
Although Bebo doesn’t have that much brand recognition in North America (at least compared to MySpace and Facebook), it boasts over 40 million members worldwide. Bebo is particularly well-known around the United Kingdom. According to Alexa, 39.1% of its visitors are from the U.K., with 11.4% and 8.3% of its traffic coming from the U.S. and Ireland, respectively.
Was this the right move for AOL?
The demographic of AOL users are older, less technologically-inclined Americans who are more likely to still be using dial-up. These people began using AOL back in the day when they sent out floppy disks in the mail. Unfortunately for AOL, this demographic is slowly fading away.
With this acquisition of Bebo, AOL gains direct access to a new (and growing) demographic in another part of the world.
AOL/Yahoo Acquisition?
Along with the list of potential buyers of Yahoo (Microsoft, eBay, etc) stood AOL. Their interest in buying Yahoo stems from the very points I’ve mentioned in the previous paragraph.
It seems that AOL has managed to move forward in the right direction without having to dish out upwards of $45 billion, which Microsoft will likely pay for Yahoo .
I agree that AOL definitely needs to step up their game so maybe this will do it for them. I’m not familiar with Bebo but I’ll definitely have to check it out. Thanks for the info!
You’re welcome, Jami. It’s good to see AOL starting to make some smart decisions again.