Posted March 13, 2008 2:41 pm by with 7 comments

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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.

  • Here are some numbers for social network valuations:

  • Well if they keep growing in types, membership and traffic volume, not sure how a bubble could be present.

  • Bebo is lots of money,but if I have$850 million, I will never buy the site.

  • 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.

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  • 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.

    Mr. Music’s last blog post..Psychedelic Music On Last.FM

  • Sitting in you’r house, single, bored because there is nothing on T.V and there is nothing to do outside………hey wait a minute ive got a computer linked to the NET. Give it a go, there will never be enough sites like Zorpia, Bebo, MySpace, Youtube, you get the picture, these sites are made to enhance a persons ability to interact with other people and add their views and believe me it does work as i once was a recluse but i started surfing and it gave me confidence to aproach the situation on hand and i gained a whole new perspective of life. The Social Network does work and $850 in my pocket would be well invested into a site like one of these. The profits are astronomical.