The Fall of Bebo and The Real Value of Social Networks

7 04 2010

Just two years after being bought for £417 million ($850m), the former social network of choice for the pre-teens, Bebo is to be sold off or closed down.

To put that in context the value of the site in just five years went from zero to not far short of a billion dollars back to zero (if no buyer is found).  The reason is simple.  The pre-teens grew up and went to Facebook and the generation that followed, like the 12 year readers of Just Seventeen magazine desperate to play with the bigger kids, have gone straight to Facebook (even if that means telling a porkie pie about their d.o.b. when they set up to their accounts).  In February Facebook had 462.7 million unique users and Bebo had just 12.8 million.   “AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking” a  memo sent by the parent company to Bebo staff this week explained.

Whilst Facebook becomes more entrenched as the No 1 social network what will this mean for MySpace and other legacy networks?    We also need to understand better where the real value lies if the life cycle of a network that once generating 60 million page views a day can be so short.

Bebo was set up in Michael and Xochi Birch in January 2005.  It could close as early as May this year.

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