On March 13, 2008, Aol purchased Bebo (which stood for “Blog Early, Blog Often”) for a staggering $850 million. At the time everyone thought Aol had over paid for the social network, and with the once giant Internet portal now dumping the service, it seems they were right.
It had been reported back in April that Aol was looking to either find a buyer for the social network which was the top network in England for some time, or they could possibly even shut it down. Either way, the company wanted to rid itself of this network that it had barely owned for two years.
On June 16th, rumors began to circulate that a company named Criterion Capital Partners (CCP) had bought the site, but there was no official word coming out. On the 17th of this month, it was confirmed.
“The young, highly active user base, revenue history, presence in countries throughout the world and solid technical infrastructure make it an attractive media platform both as a standalone entity and in the context of our broader investment objectives,” said Adam Levin, managing partner at CCP.
Where the whole story gets weird is that reports of what price were paid for the site. Some sources are saying $10 million, and others are reporting $2.5 million. According to an internal e-mail sent to Aol employees obtained by TechCrunch, there was a good reason for this low price sale:
For AOL, the transaction will also create a meaningful tax deduction, which should allow us to more effectively manage our tax strategy.
The reason I find this whole thing so surreal is that Facebook paid $50 million for FriendFeed some time back, and that was a site that never came close to the amount of traffic Bebo used to enjoy. Even with its decreased traffic, the network is still viable and is still quite popular in certain areas. Even though it is based out of San Francisco, for some reason it was England where it enjoyed its biggest success, without ever really finding a place for itself in its home country.
Even if $10 million was the ultimate price, it feels like CCP picked up a heck of a bargain. Who knows if CCP even really needed the site, but at that price, how could you say no? It’s like that item you end up coming home with from a sale that as soon as you get home you look at it and go, “Why in the world did I buy this?” In this case, it just happens to be a whole social network.