AOL-Bebo: $850M Deal Closes; AOL Combines Bebo, AIM, ICQ Into People Networks Headed By Shields
By Staci D. Kramer - Sun 18 May 2008 10:28 PM PST
It’s official—AOL (NYSE: TWX) now owns Bebo, closing the $850 million acquisition roughly two months after making it public. The social media network will not stand on its own; instead, AOL is combining Bebo, AIM, ICQ and its other community platforms into a new business unit known as the People Networks with some 80 million unduplicated users. Joanna Shields, who led the sale as president of Bebo, joins AOL as president of the new unit and corporate EVP. Shields (via video chat) and Grant spoke at our EconSM conference late last month but couldn’t discuss detailed plans. They went deeper in a joint interview on the eve of the People Networks’ announcement.
AOL’s Platform-A will handle the new unit’s advertising with the exception of an existing deal between Bebo and Yahoo (NSDQ: YHOO) for the UK, Ireland and Australia. As for international strategy, Shields told paidContent, “We’re going to match AOL’s international strategy throughout the rest of this year.” On the ad side, “we’ll be definitely leveraging assets of Platform-A for the expansion of Bebo.” And what about branding? Could ICQ be rebranded? AOL president and COO Ron Grant said carefully: “We are committed to looking at what’s the right brand for the right audience. We have unified the back end (of AIM and ICQ) to make sure the technology platform is unified and open.” Bebo’s deal with Yahoo is until September 2009, so it is likely that won’t be renewed...this is Yahoo’s only deal with a big social net: Google (NSDQ: GOOG) has MySpace and Microsoft (NSDQ: MSFT) has Facebook.
Some excerpts:
-- On the new unit: Grant still wasn’t ready to go into detail about the financials of the new unit: “Clearly this will be a standalone unit with its revenue and profitability goals. We plan on providing more transparency.” Shields pointed out that Bebo already is profitable and that the new unit is expected to start in the black. Also joining Shields at the new unit: Bebo’s strategy and planning VP Evan Cohen, sales VP Mark Charkin, marketing and bizdev SVP Ziv Navoth, VP and chief safety officer Rachel O’Connell and communications director Sarah Gavin.
-- On advertising: Grant: “Platform A will be the organization that will handle the advertising but we’re very much going to be moving into the engagement marketing aspect that Joanna’s built because we think it really provides a differentiator, not only from the content side but how it’s sold.” What happens with Yahoo? “I think we’re evaluating our options. Right now they’re our partner of record and we evaluating what the right next steps are. But we plan on looking at all our options in that situation. They’re providing a fine service.” Shields added: “In the U.S., we don’t have a relationship with Yahoo ... The strength of the AIM user base in the U.S., that’s going to be one of our top priorities as well as the international expansion.”
-- On international plans: Shields: “We’re behind the curve already. I’m not quite sure how long it will take us to catch up to them (AOL).” Bebo is strongest in the UK, weaker in the US. The immediate focus beyond the UK and US for Bebo will be Europe. But her new access to deeper resources may alter some of the roadmap: ”I still haven’t quite switched my brain from the scarcity world of a startup.” Ideally, “I’d like to see Bebo as a social media network be able to say we’re global and everywhere that’s relevant.” They’ll be launching at least six different language sites.
-- Content: Shields says Bebo will continue as a social media network and will encourage original programming. Branded entertainment presented serially has worked well for Bebo. As for other content, “I’m very excited we don’t have to go out and do the content partnerships.”
Posted in: Companies, Bebo, Money, M&A, Social Media
Tags: joanna shields, ron grant, aol,
