In a massive case of “what were they thinking” AOL bought social networking site Bebo for $850 million; and in a case of “what are they thinking now,” the company has sold it, reportedly, for around $10 million to a hedge fund: Criterion Capital Partners.
It was stupid for AOL to pay that much in the first place and maybe naive to think that it could take on Facebook. But now, on the other end, it’s probably misguided to get rid of the site for that little.
I don’t know what the headcount and other costs associated with Bebo are. But Facebook’s privacy flap has created an opening for others to exploit. Alternatively the site could be reinvented and/or the platform could be used in various ways (a la Yahoo-Facebook) across AOL properties perhaps.
Bebo could reposition as a media-sharing site for parents or families as Multiply has tried to do. Or it could be reinvented as a mobile service. The point is there are probably several ways, now that AOL wrote off its value, to use Bebo.
I doubt the hedge fund will do much with the site. A year or so from now they’ll flip it or be compelled to shutter it entirely.
Screenwerk 
June 16, 2010 at 7:39 pm
Almost makes you think that Gerald Levin and Steve Case are still involved brokering these deals.
Sounds like a pretty dumb move too. How many employees does AOL still employ? I need to take another look at the companies prospectus. Anytime the words “sell” and “hedgefund” are discussed with “internet web brands” and “search”….. it only makes sense for one to assume stupidity, cronyism, liquidate, and questionable deals.
June 16, 2010 at 9:52 pm
This wasn’t even their worst… Netscape cost them $10 BILLION with a B…
June 27, 2010 at 9:09 pm
I agree Jeff. The Netscape sale was a total joke.
June 28, 2010 at 11:49 pm
$850 million! That could solve world debt – its ludicrous! Don’t get me wrong when Microsoft invested into Facebook a few years back at a massive evaluation, it looked costly – but looking at it now – the deal looks pretty sweet! You can’t blame AOL for trying but it’s a massive mistake and I just can’t help but feel that this may be the final nail in the coffin for AOL.
September 27, 2010 at 8:31 am
Wow- that’s a heck of a lot for that site. But I feel the investment was very clever of AOL – they tool a chance, but over a very short period of time created a profit of 1.5 mil. I would love to be able to create a profit like that over 1 year, let along the short time they kept it.
April 7, 2011 at 1:36 am
Every business has ups and downs. What AOL did was a mistake but they surely learned a lesson from it. AOL is well-established company and I think they don’t need to buy social networking sites, they should rather create a new one or just improved aol.com and make it a social networking site. it’s gonna be like hitting 2 birds with 1 stone.
April 12, 2011 at 2:46 pm
Haha- thats a nice strategy to ruin a business. But seriously thats the biggest waste of money ever. It’s like buying a brand new car and then selling it as a secondhand car the next day. I don’t understand it.
Jon
April 22, 2011 at 4:12 pm
AOL seems to have some serious issues when it comes to buying sites, Why do they buy when the site is in decline?
October 18, 2012 at 7:05 am
AOL loves to spend money where it its not needed at times. However, thats a heck of alot of money. But that’s true, every business does have it’s up’s and down’s.