AOL sells Bebo to venture capital firm
AOL has confirmed it has sold its social network Bebo to US-based venture capital firm Criterion Capital Partners, which plans to close Bebo's UK office.
AOL bought the social networking site for $850m in March 2008 but is reported to have sold it for $10m.
CCP said it would take over Bebo's global operations immediately and retain a San Francisco-based headquarters.
It plans to make an offer of appointments to as many staff as it can, but Bebo's UK operation will cease to exist.
Adam Levin, managing partner at CCP, said: "[Bebo's] 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."
CCP said Bebo has a strong user base across the globe, including in the U.S., the UK, Ireland, Australia, New Zealand, Canada, Poland, France, Germany, Italy, Spain, India, Pakistan and the Netherlands.
In a note sent to all employees this morning AOL chief executive Tim Armstrong said: "In April we communicated the fact that Bebo was among the assets we would be not be keeping as part of our main portfolio of businesses.
"At that time, we indicated that we hoped to finish our strategic evaluation by the end of May, which we did. Today we are announcing that we completed the sale of substantially all of the assets of Bebo, Inc. to Criterion Capital Partners, LLC.
"For AOL, the transaction will also create a meaningful tax deduction, which should allow us to more effectively manage our tax strategy."
The sale ends a strategic review begun in April this year when AOL announced it was either going to sell the site or close it down due to huge profit losses, saying it was not in a position to give Bebo the investment it required to compete in the social network space.
In its first year under AOL ownership Bebo's UK revenues dropped 29% year on year to £6.25m, according to its financial results for the 12 months to 31 May 2009.
The site has also become less popular, with UK user figures dropping by 60% between May 2009 and May 2010 from 3.9 million unique users to 1.5 million unique users, according to UKOM.
In January Bebo lost a third of its workforce in the UK having already lost its senior staff including president Joanna Shields and European managing director Kate Burns.
Shields left the social networking site in May last year after securing Bebo's sale to AOL. Burns was promoted to head of AOL UK and Europe in July last year.
This article was first published on mediaweek.co.uk
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