AOL-Bebo: Reaction From Analysts
By Joseph Weisenthal - Thu 13 Mar 2008 06:46 AM PST
—Spencer Wang, Bear Stearns: Cash flow at Bebo is likely to be pretty light, so the buy will cause some dilution at AOL (NYSE: TWX), although it will not have a meaningful impact on Time Warner’s bottom line. The deal gives the company a “beach head” in the social networking space, which, when combined with other AOL assets (AIM on the social networking side, Platform A on the ad side), will drive strategic value. Other than that, the main value is in helping AOL grow internationally.
-- Alex Burmaster, European internet analyst, Nielsen Online: “It comes as no great surprise to see another traditional publisher buying in to the power of the social networking phenomenon. Microsoft (NSDQ: MSFT) did it with Facebook, News Corp (NYSE: NWS) did it with MySpace so Bebo was the next logical target. Bebo has an incredibly strong brand identity, particularly with the teenage and young adult market, so it will be very interesting to see how AOL makes best use of their new youthful Trojan horse.”
More as we get them…
