AOL Wants Out of Bebo

Two years after buying Facebook rival Bebo, AOL is looking to unload the social networking site.

AOL paid $850 million for Bebo in 2008, at the time it was one of the largest social networking sites in the United Kingdom. At the time, AOL said the acquisition was part of a strategy to gain a foothold in the social media market and to help it grow internationally.

In a message to employees Tuesday, AOL said it is no longer committed to Bebo and would seek a buyer or close it.

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The memo, from AOL Ventures Executive Vice President Jon Broad, said in part, “Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete Polaris Pool Cleaner Parts in the competitive Social Networking Space,” the AOL memo said. “AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in Social Networking.”

AOL is actively seeking a buyer for the business and says it will complete its strategic evaluation by the end of May. Bebo’s future may include either a new owner, or a shutdown by AOL this year.

Since its split from former parent Time Warner, AOL has been accelerating its transformation into an advertiser-driven content provider.

While that transformation has led to acquisitions of smaller companies and their technologies, it has also led to thousands of job cuts.

AOL (NYSE: AOL) reported a profit in its first quarter as an independent company, with net income of $1.4 million compared to a net loss of nearly $2 billion a year earlier.

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Source:

http://www.bizjournals.com/washington/stories/2010/04/05/daily25.html


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