What is Bebo? That’s the question many people are asking today. Businessweek.com is reporting that AOL has pulled out it’s sizable checkbook to purchase the pre-teen social networking website known as Bebo. Buying Bebo gives AOL access to their growing teen and preteen audience, as well as providing a way to compete with the other big social networks online, including MySpace and Facebook.
AOL will pay $850 million for the California-based Bebo, a move which surprised many analysts. Bebo is a relatively small web site, but their growth has been significant over the past year, and they’re now the third most popular social networking site online.
“Old media” corporations are in a bit of a feeding frenzy, seeking to buy into the social networking bandwagon. Rupert Murdoch’s NewsCorp purchased MySpace a few years back for $580 million, and Facebook has received plenty of offers as well, though the company has remained independent thus far.
Bebo was established in 2005 and currently has 40 million users around the world. The influx of preteens to the site has helped Bebo grow significantly over the past year. Visits to the web site have increased by 60% from January of 2006, and Bebo now boasts approximately 7.1 million unique hits per month.
Even though Bebo is growing at an impressive rate, its user statistics are still humble compared to MySpace’s global audience of more than 100 million. Facebook also has a significant advantage, with over 64 million members and a 200% increase in visits to the site over the past 15 months.
But where MySpace and Facebook have focused on attracting older teens and young adults, Bebo is attempting to carve out a niche for itself with the younger teen and preteen audience. The challenge AOL will face in adding Bebo to its roster of online real estate is to differentiate the site from the other popular social networks.
AOL CEO Randy Falco says that the company plans to merge Bebo with AOL’s instant messenger service, and monetize the site through teen-oriented advertising. Analysts predict that advertising on social networks will increase to $2.89 billion in 2009.
Bebo established itself quickly as an online presence, and garnered coveted partnerships with the likes of MTV, CBS and even the BBC. AOL will seek to expand the site, and the challenge will be to bring in the advertising dollars without alienating Bebo’s notoriously fickle teen demographic.
Users of social networking sites — especially teen users — are known to be wary of heavily advertised, overly commercial ventures. Bebo’s members could quickly bail on the site if they sense Bebo is becoming too predictable and commercial. So in this sense, AOL must walk a tight rope between increasing the advertising revenue of the site, while maintaining Bebo’s low-key, irreverent attitude. Whether AOL can successfully turn a profit from Bebo will depend on the subtlety of its adverts, and the uniqueness of content it can contribute to the site.
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