AOL Buys Bebo

March 13th, 2008 at 12:00 am

AOL buys Bebo

Content is power (and money) in Web2.0.  That’s the definitive point that determines this web generation from the last. 

Social Networks are worth serious money, in July 2005, News Corp. purchased the parent of MySpace for $580 million. At the time, MySpace had about 21 million users, costing $27.62 per user.  Facebook is valued at $15 billion with 50 million users which comes to about $300 per user.  Today, AOL bought Bebo for $850 million with 40 million users.

$21.25 per user is the magic number AOL paid for today to acquire Bebo, a fast growing social network ranked number 3 in the US.  Randy Falco, chairman and CEO of AOL, said,  “Bebo is the perfect complement to AOLs personal communications network and puts us in a leading position in social media."

AOL intends to use the social network  as some sort of branch they’ll marry with AIM and ICQ. Talk about an odd couple.  However aside from that information, it is unclear what exactly AOl’s intentions for Bebo are.

In the meantime, Bebo will be running as if nothing’s changed.  Their current president Joanna Shields will be at the wheel reporting to AOL president ROn Grant.  However, Bebo founders Michael Birch and Xochi Birch will shortly be leaving the startup.