14 DAY TRIAL // Parties involved have now confirmed AOL’s Bebo sale. The sale was first rumored yesterday, but there were little details to go on. Now we have the name of the buyer, Criterion Capital Partners (CCP), but there’s still no price tag for the social network. The selling price is rumored to be either of $2.5 million or lower than $10 million, depending on the source. Either sum is a huge hit on the initial purchase price of $850 million, but AOL is getting some serious tax cuts, in the hundreds of millions, out of the deal as well.
“The young, highly active user base, revenue history, presence in countries throughout the world and solid technical infrastructure make it an attractive media platform both as a standalone entity and in the context of our broader investment objectives,” Adam Levin, managing partner at CCP, said.
“Criterion Capital Partners are specialists in facilitating growth plans and turnarounds, and are well placed to drive Bebo’s effort to strengthen its foothold within the highly competitive social networking arena,” Tim Armstrong, chairman and CEO of AOL, added, in the usual exchange of pleasantries.
CCP specializes in turning around struggling companies usually through cutbacks and better product strategy. With Bebo, it’s got its work cut out ahead of it, as AOL slashed most of Bebo’s workforce in the past year. What’s more, the social network, like many others that were popular in the ‘first wave,’ has been struggling recently, having been all but crushed by Facebook.
CCP’s intentions with Bebo are unclear, but the social network will continue to be based in San Francisco, where it is currently headquartered. CPP will be taking over Bebo “immediately.”
AOL acquired Bebo for $850 million in 2008 in what the company itself described to be a risky move. At that time, several social networks were going head-to-head and Bebo had a strong user-base in several countries. Since then, user numbers have dwindled, while Facebook now dwarfs all of its former competitors.