AOL has sold social networking site Bebo for a fraction of what it paid for the company only two years ago.
Bebo is the third largest social networking site after Facebook and MySpace, which is like RC Cola claiming to be the third largest cola brand after Coke and Pepsi. Bebo has a sliver of the registered users of its larger competitors, and its steadily declining monthly visits make it about as popular as search results for "lawn care." In other words, AOL is lucky to have gotten whatever it did for the thing.
The speed at which Bebo crashed isn't news, as Internet phenomena emerge and disintegrate almost as fast as tweeting about it will allow. It only took a few years for the smart people at eBay to fail at figuring out what to do with Skype, and only a bit longer for the brain trust at News Corp. to crap out MySpace. I find it hilarious that the entrepreneurs who come up with this stuff, like Janus Friis, Chris DeWolfe, the Birches, are considered geniuses when they cash out, and then the world discovers that they have absolutely no idea or aptitude for running more mature businesses (or working within the collaborative environments they and the media celebrate).
Doesn't anybody remember that Steve Jobs had to spend more than a decade wandering the desert before he was ready to reclaim the helm of his "start up?" None of this is distant history, and yet there's not been one story on how or why tech startups keep getting oversold, then underperform, and ultimately resold for peanuts. I think it's why there’s no rhetorical gasp in any of the coverage on Bebo's selling price. We expect it.
AOL's experience mirrors this kabuki drama somewhat, in that it was the Facebook or Google of the first Internet revolution. Remember when it was the email service ("got mail?") and those ubiquitous CDs in the mail constantly reminded us that it wanted to be our portal to the web? AOL was so amazingly wonderful that it merged with Time Warner in 200 for $350 billion and promised to remake the media business in the image of the Internet. It was spun off 10 years later at a value of $5 billion or so.
So AOL was the Bebo of the last decade. Funny how history repeats.
AOL's plan now is to remake itself into a set of media channels for original content (the broadcast networks tried that, and so did Bud TV). I'm sure there are beautiful slide presentations describing how it'll work...consumers will seek "content," AOL will monitor their clicks for targeting said content and then sell it to advertisers to better tee-up advertising, yadda yadda. I'm a bit suspicious of such plans, since people never do what they're supposed to do, and technology-based answers never quite address the questions that really matter.
I wonder if the slide template has changed since it promoted its last mondo giganto plans for media world domination. Of course it has. AOL spent oodles on a new logo and brand image.
What about Bebo, though? A hedge fund owns it and must have its own pretty slide presentation on what they'll do with it. My guess is the plan will center on cutting deals with third-parties to exploit whomever is unlucky enough to still be a Bebo member. Maybe they'll add some cool but purposeless techno gizmo, as long as it helps it make its money back ASAP and/or spin off the deal to yet another buyer who buys into the hype about social networking.
What COULD Bebo do?
- Go for broke. After all, it already is. The world doesn't need another social networking site (Orkut, Meebo, High5, and a host of other services are busy vying for the scraps), so what would happen if the new team got in a room to discuss what would be totally unexpected, shocking, counter-intuitive or anti-hype? Could it announce such intentions publicly and get people involved in helping find answers (i.e. a social solution to a social problem)?
- Explore authenticity. The monetization models for every other social networking site rely on (or end up at) exploiting their members for advertisers. No amount of authenticating can make brand pages or sponsored tweets authentic. I wonder what an alternate model might look like...one that relied on a credible, reliable, commercial-free environment? Who knows if it's even possible, or if its members would care (see prior point for a way to find out).
- Resist the impulse to crapify. Remember how junky MySpace got after it was bought? Its new owners wanted to get as much revenue out of it as possible, and it showed. Bebo doesn't look bad right now; actually, it doesn't really look like anything, and its member interaction is a little dicey (I joined over a year ago just to own my name, and since then I've received seven invites from scantily-clad women and six emails from women who all seem to live somewhere in Asia). Could it assert some higher standard for look-and-feel and experience? Would it matter to anyone?
The definition of "social network" is exploding around us, as it should be obvious that email, VOIP telephony, online auctions, mobile phone numbers, and any other tool that lets people connect is a conversational tool, by definition and by practice. In and of itself, an online site that provides those connections is so yesterday's news. Bebo could figure out a new role for itself, or at least fail gloriously by trying.
Wait, I've got it!
Why not make its last gasp into a documentary movie, set of learning materials for business schools, and an online real-time entertainment portal? I bet that could earn back its measly $10 million purchase price, and then some...