{"id":124,"date":"2008-03-14T13:54:58","date_gmt":"2008-03-14T21:54:58","guid":{"rendered":"http:\/\/web2innovations.com\/money\/2008\/03\/14\/22m-uniques-mo-site-bebo-goes-to-aol-for-850m-in-all-cash-deal\/"},"modified":"2008-03-14T13:54:58","modified_gmt":"2008-03-14T21:54:58","slug":"22m-uniques-mo-site-bebo-goes-to-aol-for-850m-in-all-cash-deal","status":"publish","type":"post","link":"https:\/\/web2innovations.com\/money\/2008\/03\/14\/22m-uniques-mo-site-bebo-goes-to-aol-for-850m-in-all-cash-deal\/","title":{"rendered":"22M uniques \/ mo site (Bebo) goes to AOL for $850M in all cash deal"},"content":{"rendered":"

Bebo<\/a>, the global social network<\/a> strong enough in UK and among the first in US, has quietly been up for sale for quite some time shopped around by the secretive investment firm<\/a> Allen & Co<\/a>. A number of potential acquires passed on a deal for Bebo, including News Corp.<\/a>, Microsoft<\/a> and Google<\/a>, sources tell. Yahoo<\/a> is also rumored to may have also taken a long look. Until now when AOL has publicly announced they had acquired<\/a> bebo.com<\/a> for $850M<\/strong> in a deal all in cash off only $20M in revenues for 2007. AOL and Bebo have been in talks since September 2007. It is also publicly known fact that Bebo was looking for a price\u00c2\u00a0over $1B.<\/p>\n

Launched in the middle of 2005 Bebo had quickly grown to millions of visitors per month and today stands at over 40M <\/a>registered users as per company\u00e2\u20ac\u2122s claims. Bebo has raised only (taking into consideration their exit number) $15M from Balderton Capital<\/a>, which represents a very nice exit for the venture capitalists.\u00c2\u00a0 Competitors include MySpace<\/a>, Facebook<\/a>, Friendster, Piczo, Google\u00e2\u20ac\u2122s Orkut, Flickr, and literally an endless army of social networking sites around the globe. Bebo has offices in the UK, San Francisco and Austin, TX with over 100 employees.<\/p>\n

A quick look into the numbers reveals that AOL paid roughly $22 per registered user<\/strong> in Bebo\u00e2\u20ac\u2122s acquisition. comScore<\/a> reports for 22M unique visitors per month to bebo.com, which values each unique visitor at $39<\/strong>. Quantcast<\/a> reports for less than 2M American visitors per month to bebo\u00e2\u20ac\u2122s site but since the site appears to be not quantified we should not take these numbers for the correct ones.<\/p>\n

Richard MacManus<\/strong> from RWW<\/a> does not think this will make much headway for either company and calls it that way \u00e2\u20ac\u0153Ultimately we’re talking about two middle of the road Web brands\u00e2\u20ac\u009d. The Wall St Journal’s Kara Swisher<\/a> has analyzed the deal and thinks in first place the numbers are not so big but sees that AOL is getting very attractive social-networking service and a very experienced exec who has been running it. According to the several sources, she quotes, who were privy to Bebo\u00e2\u20ac\u2122s financials, for example, Bebo\u00e2\u20ac\u2122s revenues for 2006 were only $7 million with $3 million in EBITDA<\/a>. In 2007, the results are still small, with $20 million in revenues and $5 million in EBITDA. Using 2007 results, that means Time Warner\u00e2\u20ac\u2122s (TWZ) AOL paid a handsome 42.5 times revenues and an incredible 160 times EBITDA.<\/p>\n

Current President Joanna Shields<\/strong> (in the middle) is said will continue to run Bebo and will report to AOL President Ron Grant<\/strong> (in right) while the founders Michael Birch<\/strong> and Xochi Birch<\/strong> will shortly be leaving the startup, apparently.<\/p>\n

Since its inception, Bebo has established a radical new vision for online media and engagement marketing, combining community, self-expression and entertainment, enabling its members to consume, create, discover, curate and share digital content in entirely new ways.\u00c2\u00a0 Bebo global users have high engagement levels spending an average of 33 minutes a day on the site. Its groundbreaking Open Media platform ushered in a new way for Bebo users to experience content online, while giving global media companies like MTV<\/a>, CBS<\/a>, BBC<\/a> and more than 400 others, a new way to promote, distribute and monetize their programming. “Engagement Marketing,” is Bebo\u00e2\u20ac\u2122s initiative for brands to build long-term relationships with their target audience.\u00c2\u00a0 Today, brands from Apple<\/a> to Nike<\/a> use Bebo as a platform to establish ongoing conversations with consumers. Bebo pioneered the blending of Web-native original content with interactivity in the social networking environment by co-producing “KateModern,”<\/strong> the most successful TV show on the Web, now in its second season, followed by the soon to be premiered “Sophia’s Diary,”<\/strong> and the upcoming “Gap Year.”<\/strong> In December 2007, Bebo opened its platform to external application developers becoming the first social network to embrace both Facebook and OpenSocial APIs. (a confusing signal, as up till then everyone had assumed that OpenSocial<\/a> and Facebook platform were direct competitors.) To date, more than 1500 applications have joined the network.<\/p>\n

Together with its AIM and ICQ personal communications network, the acquisition<\/a> will give AOL a premier position in the fast growing world of social media with a network of approximately 80 million unique users<\/strong>.<\/p>\n

With a total membership of more than 40 million worldwide, Bebo is a global social media network which combines community, self-expression and entertainment to enable its users to consume, create, discover and share content. Bebo is one of the leading social networks in the UK, and is ranked number one in Ireland and New Zealand, and number three in the U.S. in terms of engagement. Its users are heavily engaged and view an average of 78 pages per usage day.<\/p>\n

The deal comes just one week after AOL\u00e2\u20ac\u2122s launch of Open AIM 2.0, an initiative that allows the developer community greater freedom to access the AIM network and integrate AIM into its sites and applications, and the announcement by Apple of a downloadable AIM application for the iPhone.<\/p>\n

\u00e2\u20ac\u0153Bebo is the perfect complement to AOL\u00e2\u20ac\u2122s personal communications network and puts us in a leading position in social media,\u00e2\u20ac\u009d said Randy Falco, Chairman and CEO, AOL. \u00e2\u20ac\u0153What 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.\u00e2\u20ac\u009d<\/p>\n

\u00e2\u20ac\u0153AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks,\u00e2\u20ac\u009d said Bebo President, Joanna Shields. \u00e2\u20ac\u0153With one and the same vision in this area, it was a natural progression for Bebo to join AOL, and we look forward to working together to continue to expand the online social experience globally.\u00e2\u20ac\u009d<\/p>\n

\u00e2\u20ac\u0153Bebo\u00e2\u20ac\u2122s dynamic management team recognizes that the Internet is less about destination and more about connecting people, culture and lifestyles,\u00e2\u20ac\u009d said Ron Grant, President and COO, AOL.\u00c2\u00a0 \u00e2\u20ac\u0153This acquisition supports our key objectives \u00e2\u20ac\u201c accelerating the growth, engagement and monetization of one of the world\u00e2\u20ac\u2122s most engaged online communities.\u00e2\u20ac\u009d\u00c2\u00a0<\/p>\n

Analyst eMarketer<\/a> predicts that by 2011, $4.1 billion<\/strong> will be spent worldwide for social network advertising<\/a> \u00e2\u20ac\u201c a dramatic increase from the $480 million spent in 2006.\u00c2\u00a0 In 2008 alone, global ad spend in the social networking arena is expected to increase 75% year over year, amounting to $2.1 billion.<\/p>\n

In recent months, AOL has moved aggressively to bolster its position in areas critical to its emergence as a leading advertising-supported Web media and marketing company. Building on its number one position in third party display with Advertising.com, AOL has spent nearly $1 billion on online advertising acquisitions, including market leaders like ADTECH, buy.at, Lightningcast, Quigo, TACODA and Third Screen Media to create Platform-A. Platform-A is the top display ad serving network focused on helping marketers build brands that perform online.* In Web content, AOL\u00e2\u20ac\u2122s revitalized network of sites has experienced five months of consecutive page view growth and key categories like Music, Television, Moviefone, TMZ, Money & Finance, News, Living and Body are all in the top four in their respective categories.<\/p>\n

As part of its international growth plans, AOL has launched 17 international web sites over the last year and has plans to expand to 30 countries outside the U.S. by the end of 2008. In addition, AOL teamed up with HP last September to include localized versions of the AOL.com portal and other AOL services as the default setting on HP computers shipped in the United States and around the world. Bebo, which has announced plans to launch in five countries this year, will be featured prominently in AOL\u00e2\u20ac\u2122s international expansion efforts after the deal is closed.<\/p>\n

AOL was advised by Banc of America Securities LLC<\/a> and Deutsche Bank Securities Inc<\/a>. Bebo was advised by Allen & Co<\/a>.<\/p>\n

The deal is said to be subject to U.S. and EU antitrust<\/a> regulations before it effectively closes.<\/p>\n

More about AOL<\/strong><\/p>\n

A Global Ad-Supported Web Services Company<\/p>\n

AOL<\/a> is a leading global advertising-supported Web company, with the most comprehensive display advertising network<\/a> in the U.S., a substantial worldwide audience, and a suite of popular Web brands and products.<\/p>\n

The company\u00e2\u20ac\u2122s strategy focuses on increasing the scale and sophistication of its advertising platform and growing the size and engagement of its global online audience through leading products and programming.<\/p>\n

Core Statistics<\/p>\n