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Broadband & Mobile Featured Article
March 17, 2008
AOL to Buy Bebo for $850 Million
By Nathesh TMCnet Contributing Editor
AOL (News - Alert) says it will enter into the fray for its share of the global social network advertising market by buying Bebo, the world’s third largest social network.
The price tag for Bebo is $850 Million and AOL plans pay for a getting a stronghold in the multi billion dollar business of social networking and advertising.
Bebo is one of the Britain’s largest social networks and is ranked number one in Ireland and New Zealand and a total membership of more than 40 million worldwide. It is number three after MySpace and FaceBook.
The deal comes just one week after AOL’s 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 (News - Alert) of a downloadable AIM application for the iPhone.
The all cash purchase of Bebo would place AOL in a commanding position in the global social media and with some 80 million exclusive users. Ron Grant, AOL's president and chief operating officer said, “This deal should help us expand internationally and Bebo grow in the United States.”
AOL was leading in growth for several periods when it was all dial-up outfit. However, the growth in terms of revenue slowed when dial up subscriptions declined. Time Warner (News - Alert), Inc. AOL’ parent, as a result of this slowdown even considered selling the internet unit. It was looking at every way possible to increase its ad revenues. And it hit the gold mine by realizing the growth of social networks such as Bebo.
Social networks are gold mines in terms of their predicted future growth. In 2005 MySpace, the number one social network in the US was bought by News Corp (News - Alert) for $580 Million but the MySpace’s present value is now worth $15 Billion. And when Microsoft’s purchased 1.6 percent stake of FaceBook, the second largest social network in the US for $240 Million, it only argues for the case that just one such network has a value of $15 Billion.
“AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks,” said Bebo President Joanna Shields. “With 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.”
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 recent months, it can be said that AOL was aggressively seeking ways to mark itself as a leader in the emerging advertising-supported Web media and marketing company.
Analyst eMarketer (News - Alert) has predicted that by 2011, $4.1 billion will be spent worldwide for social network advertising, an increase from the $480 million spent in 2006. In 2008 alone, global ad spend in the social networking arena is expected to increase 75 percent year over year, amounting to $2.1 billion.
Bebo’s Open Media platform allows users to get online content is various thoughtful ways which prompted media companies CBS, MTV, BBC and many others a brand new to promote their content. And also Bebo users spend approximately 33 minutes online every day which also add to the thought of these companies that more of their content can actually reach the desired customer base.
After the transition of the deal is over AOL now Bebo president Joanna Shields will continue to run the company, reporting to AOL President and Chief Operating Officer Ron Grant.
Nathesh is a TMCnet Contributing Editor.
Don't forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP
Communications industry. The library offers white papers, case studies and other documents which are free to registered users.
The price tag for Bebo is $850 Million and AOL plans pay for a getting a stronghold in the multi billion dollar business of social networking and advertising.
Bebo is one of the Britain’s largest social networks and is ranked number one in Ireland and New Zealand and a total membership of more than 40 million worldwide. It is number three after MySpace and FaceBook.
The deal comes just one week after AOL’s 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 (News - Alert) of a downloadable AIM application for the iPhone.
The all cash purchase of Bebo would place AOL in a commanding position in the global social media and with some 80 million exclusive users. Ron Grant, AOL's president and chief operating officer said, “This deal should help us expand internationally and Bebo grow in the United States.”
AOL was leading in growth for several periods when it was all dial-up outfit. However, the growth in terms of revenue slowed when dial up subscriptions declined. Time Warner (News - Alert), Inc. AOL’ parent, as a result of this slowdown even considered selling the internet unit. It was looking at every way possible to increase its ad revenues. And it hit the gold mine by realizing the growth of social networks such as Bebo.
Social networks are gold mines in terms of their predicted future growth. In 2005 MySpace, the number one social network in the US was bought by News Corp (News - Alert) for $580 Million but the MySpace’s present value is now worth $15 Billion. And when Microsoft’s purchased 1.6 percent stake of FaceBook, the second largest social network in the US for $240 Million, it only argues for the case that just one such network has a value of $15 Billion.
“AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks,” said Bebo President Joanna Shields. “With 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.”
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 recent months, it can be said that AOL was aggressively seeking ways to mark itself as a leader in the emerging advertising-supported Web media and marketing company.
Analyst eMarketer (News - Alert) has predicted that by 2011, $4.1 billion will be spent worldwide for social network advertising, an increase from the $480 million spent in 2006. In 2008 alone, global ad spend in the social networking arena is expected to increase 75 percent year over year, amounting to $2.1 billion.
Bebo’s Open Media platform allows users to get online content is various thoughtful ways which prompted media companies CBS, MTV, BBC and many others a brand new to promote their content. And also Bebo users spend approximately 33 minutes online every day which also add to the thought of these companies that more of their content can actually reach the desired customer base.
After the transition of the deal is over AOL now Bebo president Joanna Shields will continue to run the company, reporting to AOL President and Chief Operating Officer Ron Grant.
Nathesh is a TMCnet Contributing Editor.
Don't forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP
Communications industry. The library offers white papers, case studies and other documents which are free to registered users.
