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AOL to abandon Bebo

Hazel Rycroft

AOL has announced that they are not in a position to support Bebo, as it is a declining business. AOL purchased Bebo for a record $850million (£557million) in May 2008, but the levels of popularity have been declining ever since.

According to figures from ComScore, Bebo's global unique visitors in
February totalled 12.8 million, 45 per cent down on the previous year. In comparison Facebook had 462 million visitors, MySpace nearly 110
million, and Twitter 69.5 million.

AOL have already had to make cutbacks, in November last year they
announced that 100 Bebo employees were leaving. "It is clear that
social networking is a space with heavy competition, and where scale
defines success," the company noted.

AOL conceded “Bebo, unfortunately, is a business that has been
declining and, as a result, would require significant investment in
order to compete in the competitive social networking space. AOL is
not in a position at this time to further fund and support Bebo in
pursuing a turnaround in social networking.”

So where did it all go wrong? Many people have pointed to the fact
that when larger companies take over, they cut staff and change the
vision of the service. The competition in this sector is rife and if
the flagship company is not able to support the program or if they
decide that they want to move in a different direction, then the small
component is simply left to the dogs.

The view at iSM is that we'll see waves of start-up social media business accompanied by waves of consolidation, for us the winners in all this are likely to be Facebook, LinkedIn and Twitter.

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