Search Marketing Blog
AOL Steps-Up Socially with $850 Million
In an announcement this morning, AOL revealed that it is paying $850 million in cash to buy Bebo, a social networking site with more than 40 million users. While that is surely a substantial number of individuals, it’s considerably less than the top two social networking sites, MySpace and Facebook, which both have more than 100 million users world-wide.
Bebo currently ranks fourth among the top 55 social networks, according to Hitwise, receiving approximately 1.15% of all US social networks visits.
So, why is AOL willing of fork-over $850 million in cash for Bebo? According to Randy Falco, CEO of AOL, the acquisition will enable the company to expand its social networks to almost 80 million unique users world-wide, by combining it with their other social properties, AIM and ICQ.
Interestingly, however, is the fact that Bebo does not add significant revenue to AOL’s top line. Bebo took in approximately $20 million in total revenues in 2007, compared to the $510 million and $145 million that advertisers spent on MySpace and Facebook, respectively (as shown in the following chart from eMarketer).
So, let me know why you think AOL stepped-up to the plate yesterday with so much cash for Bebo. I’ll follow-up with my opinion in a future post.
