Industry Observations

AOL to pay $850 million for BEBO

by Jesse Tayler
Thursday, March 13, 2008. 08:21AM

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Undated BEBO Screen Shot
Bebo has about 40 million users, at $850 million that's what? About $25 per user?

Not bad, I'd say.

The demographic is a tough to get, youth crowd.

Bebo has been at it for a few years and over the last few months they have been in talks for a purchase play between AOL and BEBO.

According to Kenneth Li and Kate Holton in their writeup for yahoo news:

The purchase comes amid a wholesale transformation of AOL from a dial-up Internet provider to an online advertising powerhouse.

It has spent nearly $1 billion to create one of the biggest third-party display ad units, Platform-A. AOL aims to gird against the prospect of bigger rivals as Microsoft Corp pursues a deal to buy Yahoo Inc and following Google Inc's purchase of DoubleClick.

"This is a tremendous acquisition and one I think is game-changing for AOL," AOL Chairman and CEO Randy Falco said on a conference call.

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"Bebo will be the cornerstone of our strategy to transform online experiences for advertisers, media companies and consumers," Falco said.

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