In even more social networking news, it was announced today that internet portal AOL has bought social networking site Bebo for £425 million.
Bebo was launched three years ago and has a membership of over 40 million worldwide users, combining “community, self-expression and entertainment to enable its users to consume, create, discover and share content.”
Bebo is one of the leading social networking sites in the UK and the US trailing rivals Myspace and Facebook. Bebo also leads the market in New Zealand and Ireland, and is run by only 100 employees spread across three global office locations.
At first this seems a lot of money for a company with such few resources, but when you consider News Corp bought MySpace for $580m in 2005 which is now estimated to be worth more than $15bn, and Microsoft bought only 1.6% of Facebook last year for $240m, the price doesn’t seem so high.
A quote from AOL chairman Randy Falco says: “Bebo is the perfect complement to AOL’s personal communication network and puts us in a leading position in social media. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”
With its acquisition of Bebo it is clear that AOL see the social networking site as an advertising goldmine which will allow them to offer advertisers access to user targeted adverts based on comprehensive user profiles and trends.
The average Bebo user views on average 78 pages a day with a daily average of 33 minutes a day being spent on the site.
“Bebo has an incredibly strong brand identity, particularly with the teenage and young adult market, so it will be very interesting to see how AOL makes best use of their new youthful Trojan horse.” - Alex Burmaster, European Internet Analyst
Research outfit eMarketer recently released a report stating that by 2011 $4.1 billion will be spent worldwide on social network advertising, up from $480 million in 2006. It is clear the struggling internet portal is looking for a significant chunk of this to turn its fortunes around.
