AOL’s Bebo Acquisition: A Social Network Bubble or Not?
Thursday, March 13th, 2008;
-- Andy Beal |
As you’ve probably heard AOL today announced the acquisition of social networking site Bebo for $850 million.
Sure, we could discuss how this will help AOL turn AIM and ICQ into an uber-social network. We could also discuss how Yahoo and Google let this slip from their grasp. But, here’s the question I’d like to ask…
Does this prove that social networks are approaching their own “bubble?”
For the past year, we’ve heard rumors that Bebo is up for sale. Valuations have typically placed the social network in the $1 billion to $1.5 billion price range. Now, after weeks of speculation that internet users are tiring of social networks, Bebo sells for just $850 million–almost half the top-end valuation thrown around last year.
Here’s what I think. The rise (and demise) of social network valuations will be bookended by two deals. News Corp’s bargain buy of MySpace for $580 million–which is now worth considerably more–and AOL’s purchase of Bebo for $850 million–which appears to be considerably less than previous valuations.
Is this a bubble? Will the popularity of social networks burst? I guess, all eyes are now on Facebook to see if its next deal keeps its valuation close to the $15 billion from October 2007.
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Category: M&A, Social Media
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March 13th, 2008 at 10:23 pm
Here are some numbers for social network valuations: http://fishtrain.com/2008/03/13/social-network-valuation/
March 13th, 2008 at 10:38 pm
Well if they keep growing in types, membership and traffic volume, not sure how a bubble could be present.
March 13th, 2008 at 11:03 pm
Bebo is lots of money,but if I have$850 million, I will never buy the site.
March 14th, 2008 at 1:35 pm
I don’t see the popularity of social networks as a whole dropping, but I could easily see it dropping for a specific social networking site.
Being social online isn’t going anywhere.
April 15th, 2008 at 11:42 pm
[…] proof of my theory, I would just point to Club Penguin. Sure, it’s stylish to talk about the Bebo exit, the Last.fm windfall, etc. But Club Penguin got $700mm from Disney, a bigger exit than anything […]
April 24th, 2008 at 9:34 pm
What is BEBO? Man, there’s just too many of these social networking sites and whatnot. Who really cares? I just… There’s just way too many of ‘em. We don’t need anymore social networking sites. I know most people I know feel like being on both facebook & myspace is already too much.
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