AOL sells Bebo, now seen as a boo-boo
AOL said Thursday that it sold Bebo, the struggling social networking site, to Criterion Capital Partners, a private equity fund, for a fraction of what AOL paid for the site two years ago.
Terms were not disclosed, but reports pegged its value at $10 million or less. AOL paid $850 million for it.
AOL once had high hopes that Bebo would help it to regain momentum, especially with younger audiences and advertisers, and to catch other fast-growing Internet franchises. At the time, it was popular in Britain.
When it bought Bebo, the chief executive of AOL at the time, Randy Falco, called it a "game-changing acquisition" that would turn AOL into "a social media powerhouse." AOL also had hopes Bebo would help AOL’s instant messaging service bring in revenue. But Bebo was eclipsed by Facebook, which now has 500 million members around the world.
At the time of the deal, AOL was owned by Time Warner. Now, AOL is independent, and its new management team, led by Tim Armstrong, the chief executive, is struggling to engineer a turnaround.