March 14, 2008 | Friday

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AOL buys Bebo. What now?

By Jackie Danicki - Blogger in News |Search Engines |Social Media

I blogged last month that this may have been coming: In a deal that sees AOL willing to shell out $40 per visitor (or $22 per registered user), UK-founded social network Bebo has been acquired for $850 million in cash. Microsoft won’t be pleased about this.

As TechCrunch UK editor Mike Butcher points out:

A key part of this deal...is that due to a deal last year Bebo is already integrated with AIM/ICQ. At a stroke that creates a big IM network which will [create] problems for MSN Messenger for a while to come. Let’s hope they buy Skype too - that would make life simpler.

It should be noted that Techcrunch had the inside track on this deal a month ago.

With the recent exit of Platform A chief Curt Viebranz, EVP for global advertising strategy Dave Morgan and Platform A VP of marketing solutions Kathy Kayse, it’s easy to conclude that this deal may have been a contentious one at AOL. Now there are further rumours that AOL will be axing half its ad sales staff by integrating several teams into one.

Unsurprisingly, there was a firm “no comment” response when AOL was asked on the press conference call yesterday whether they’d be buying or merging with Yahoo, too.

So what of Bebo’s UK founders? My sources tell me that at least one of them is now working to build a new social network - for mobile. I will blog more when I am cleared to do so, but this will definitely be one to watch.