Poor America Online. After paying $850 million for the Bebo social network in 2008, the company now admits it can't afford to keep the site running and will try to sell it soon. If that fails, AOL will close Bebo down entirely, according to an internal memo AOL provided to Wired.com.
"As we evaluate our portfolio of brands against our strategy, it is clear that social networking is a space with heavy competition, and where scale defines success," reads part of AOL Ventures executive VP Jon Brod's memo to employees. He also wrote:
As a result, the company is trying to determine whether to sell Bebo or shut it down and hopes to have an answer by the end of May. The memo (from PaidContent) was sent to employees in advance of a formal filing to this effect tomorrow in Britain.
TechCrunch pointed out last month that tax rules could induce AOL to close Bebo, because that way, it could write off $380 million of the full purchase price, which is probably much more than AOL would be able to sell Bebo for, even considering the tax advantages of selling at a big loss.
Either way, this is a heavy blow for AOL. In a big bet on social networking, the company spent nearly a billion dollars on the site to enter a space now dominated by Facebook. The company planned to merge its ICQ and AIM instant messaging networks with Bebo, creating a synchronous and asynchronous social network, but AOL Bebo failed to gain traction against Facebook and was also circumvented by Twitter in the short public-messaging space.
What about Bebo users, most of whom Alexa says live in the United States and United Kingdom?
When MySpace acquired "certain assets" of the shuttered imeem, it took a while for playlists to transfer to MySpace, and songs embedded elsewhere on the net turned into ads, so it's not clear whether Bebo users' personal information, messages, photos, videos and friend networks would survive integration with another network -- even if AOL sells Bebo, which it likely won't.
Bebo still attracts 12.8 million unique visits per month, according to Comscore Media Metrix's February numbers, so clearly some folks are still using it, and they won't be too pleased if or when their stuff disappears. However, these things do happen, and this is yet another good reminder that there's no law against closing down a website. That's why data portability is so important.
See Also:
- What Do We Want? Our Data. When Do We Want It? Now.
- 4 Ways One Big Database Would Help Music Fans, Industry
- Bebo Founder Wants to Redefine the Dictionary
- Bebo's New Platform Follows in Facebook's Footsteps
- The Future is Social, Not Search, Facebook COO Says
- MySpace Music Acquires Shuttered Imeem Music Service
- MySpace Replaces Embedded Imeem Playlists With Ads
- Walled Garden No More, AOL Adds Social Networks to Homepage
- AOL Says 'Goodbye' to Journals, Hometown
