AOL desperately jumps into social networking, acquires Bebo
AOL is still struggling to find its identity in a post dial-up Internet era. After hinting at selling off some of its divisions AOL has flipped its strategy and is now making a surprise purchase. It’s buying social networking site Bebo, which competes directly with Facebook and MySpace.
Looking to expand worldwide, AOL sees acquiring Bebo — for $850 million in cash — as a good stepping stone. Randy Falco, CEO of AOL says “what drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web, and the monetization opportunities that leverage Platform-A across our combined global audience. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers,” according to a company press release.
Social networking online is attracting more advertising dollars every year and AOL is looking to ride that wave. eMarketer pedicts that “by 2011, $4.1 billion will be spent worldwide for social network advertising – a dramatic increase from the $480 million spent in 2006.”
Though its traffic numbers are significantly below competitors MySpace and Facebook, Bebo may provide a good launch point for AOL. Here are some numbers from Compete.com:
Another of AOL’s key interests is Bebo’s integration with Google’s OpenSocial and the Facebook application platforms. It’s important to note though, that Bebo has experimented with social applications in the past and had mixed results.
Bebo’s Developers Platform was launched in early December 2007 with just over 50 applications from partners such as iLike, Flixster, Last.fm, RockYou, Gaia Online, Yahoo and Bunnyhero Labs. Millions of applications were installed in the first couple of days. Despite this, 81% of almost 8,000 respondents to an official poll voted that Applications have “made Bebo worse”, with 14% of respondents voting they have made it better and 3% with no opinion, according to Wikipedia.
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