Also-ran social network Bebo has been bought back by one of its founders for $1 million five years after that same founder, along with his wife, sold Bebo to AOL for $850 million. Sure, the couple made out like bandits, but there’s a bigger lesson here: Buying a copycat social network is a terrible idea.
Just ask Rupert Murdoch, whose News Corporation paid $580 million for MySpace after Facebook began to pummel the social network and ended up selling the company for $35 million. Or the venture capitalists who pumped nearly $50 million into Friendster before selling the social networking granddaddy for barely half that.
Unlike MySpace and Friendster, Bebo was never, not for one bright shining moment, ever regarded as a leading network. When AOL paid $850 million for the company in 2008, the heckling started immediately, and it took only two years for the aging internet conglomerate to unload Bebo for $10 million to hedge fund Criterion Capital Partners. Criterion, in turn, sold it back to founder Michael Birch (or more precisely to an incubator Birch owns.)
LinkedIn and Twitter, among others, stand as evidence that specialized social networks can thrive and that people will actively participate on multiple platforms. Facebook, meanwhile, is an example of how a general purpose social network can replace its antecedents if it offers major advantages; Facebook replaced MySpace by offering real identities, cleaner design, and an ecosystem of apps, while MySpace replaced Friendster by being more reliable and offering looser rules.
Bebo offers a counter example: If you’re neither specialized nor markedly better, you aren’t going to amount to much, except perhaps as a tool to exploit big clueless corporate suitors.
