AOL stepped up its bid to boost traffic and advertising opportunities worldwide as the struggling Internet company agreed Thursday to pay $850 million for the online hangout Bebo and a foothold in the growing arena of social media.
Although Bebo remains in the shadow of MySpace and Facebook, it is strong in some foreign markets, including Britain. According to comScore Inc., its audience outside the United States is engaged, spending more time on average there compared with the leading rivals.
AOL executives say they are planning to tap that engagement to drive traffic to AOL's other free, ad-supported Web sites, especially internationally, while leveraging AOL's instant-messaging communities, AIM and ICQ, to try to grow Bebo in the United States.
"This is going to be the cornerstone of our strategy to really go after the social media space," Ron Grant, AOL's president and chief operating officer, said in an interview.
In a conference call with reporters, AOL Chief Executive Randy Falco called the acquisition "game-changing for AOL," a move that will power the company's strategic push into advertising.
AOL has been looking for ways to increase ad revenue to offset steep declines in dial-up Internet subscriptions. After several quarters of strong growth, AOL's advertising expansion has been slowing, putting pressure on the company's parent, Time Warner Inc., to sell the Internet unit.
Falco said Time Warner's willingness to spend $850 million in cash indicated its commitment to AOL's future, though eMarketer analyst David Hallerman likened the move to renovating a home before selling it at a higher price.
Company officials declined comment on recent reports that Yahoo Inc. has stepped up talks with Time Warner about buying or forming a joint venture with AOL as Yahoo tries to fend off a $40 billion-plus takeover bid from Microsoft Corp.
The Bebo acquisition could make a Yahoo-AOL deal less likely by adding one more integration headache to the mix, said Roger Kay, who heads the market research firm Endpoint Technologies Associates.
The deal is AOL's largest since it bought MapQuest for $1 billion in 2000 (not counting AOL's $106 billion purchase of Time Warner in 2001).
San Francisco-based Bebo Inc. has about 100 employees and plans to launch in five countries this year. New York-based AOL LLC said Bebo will be "featured prominently" in AOL's international expansion.
Unlike the $1 billion AOL has spent in recent years buying various advertising companies for their technology or platform, the Bebo deal essentially involves buying eyeballs.
It is an acknowledgment that AOL needs outside help in fostering a vibrant community around social media, where visitors are encouraged to strengthen connections through photo-sharing tools, messaging features and personal profile pages.
AOL so far has failed to leverage AIM's strong community of buddies into a full-powered social network, despite such an attempt with AIM Pages. Yahoo, Google and Microsoft also have been struggling with their homegrown efforts.
Startups have been behind the most active networks online, and the Bebo acquisition serves to underscore their potential as gold mines for ad dollars.
Media conglomerate News Corp. bought MySpace for $580 million in 2005, and analysts believe the company could argue the network is worth more than $15 billion today, based on what Microsoft paid for a 1.6% stake in Facebook Inc., MySpace's next biggest rival. That stake went for $240 million in October, implying a $15 billion market value for the company as a whole.
Both MySpace and Facebook, however, have struggled to capitalize on their large audiences. Facebook drew strong criticism from its users when it unveiled its "Beacon" program for tracking and sharing information about their purchases and their activity on other Web sites.
Hallerman, the eMarketer analyst, said that despite Bebo's traffic, AOL won't necessarily find lots of ad opportunities there.
"It's just the category," he said. "There's a disconnect between traffic and monetization."
Bebo President Joanna Shields, who will stay on to run the network, said her site has successfully attracted sponsorships from major brands to run with original programming. With the targeting technologies AOL already has built and acquired, she said, Bebo should be able to extend that success to other formats such as display advertising.
"A lot of these (social-networking) companies are developing the types of assets AOL has assembled," Shields said in an interview.
It's not clear what would happen with Bebo's existing deal with Yahoo to run display advertising. Shields said it was too early to comment because the sale to AOL wasn't expected to close for another month.
Time Warner shares fell 16 cents, or 1%, to $14.60 in mid-afternoon trading Thursday.
Via- [http://www.tech2.com/india/news/internet/aol-to-pay-$850m-for-social-network-bebo/31461/0]
Captain Awesome and the League of Awesomeness were unavailable for comment. Now if you'll excuse us, we need to go die a few hundred more times in pointlessly difficult platforming levels.
Oh yes, Verizon is teaming up with researchers at Yale and a P4P Working group in order to speed up peer to peer file sharing.
We love new gadgets and we always keep an eye on every new releases that come out of the market. We adore its shiny new look and get awed by its features. But have you ever stopped and thought about the possibility that the software that comes preinstalled in our new gadgets might be infected by viruses?
As with Pleo, many may argue that Chumby is simply too cute to tweak. But if you can manage to shuffle your emotional attachments to the side for a tick, we're confident there's quite a few things you'd like to see changed. Sure, this totally unique hodgepodge of glanceable information and bedroom mainstays can handle quite a broad variety of tasks right out of the box, but considering that it's built on an open, hackable architecture, it's just begging for someone to come along and do things better than its creator.
Vstone has just unveiled "Black Ox", a 1.5-foot robot that features "20 movable axis points and fierce fighting skills."
The steampunk mac mini mod was great, but even it can't compare to the awesome powers of this Mac Mini Pro design by Hideo Takano. On the surface, he managed to hack a mini to look like a Mac Pro that measures only 3.28" wide by 7.8" tall by 6.5" deep.
Takano also added a single USB port and a power button to the front as well as an enclosure that slides off to reveal the hard drive in all its glory. The good news is that there is a complete guide on how to build one yourself—but unless you are fluent in Japanese, you will probably need to rely on the pictures.
AOL stepped up its bid to boost traffic and advertising opportunities worldwide as the struggling Internet company agreed Thursday to pay $850 million for the online hangout Bebo and a foothold in the growing arena of social media.
I suppose that it is not all that surprising to find out that without competition from the HD DVDs camp, prices for Blu-ray players have gone up.
Firefox 3.0 is dramatically faster than its predecessor and rivals, benchmark tests claim -- the result of hundreds of performance improvements designed to make the open-source browser the best at running complex Web 2.0 applications, Mozilla Corp.'s chief developer said Wednesday.
Those hot/cold "Blu-ray coming to Xbox 360" rumors just cooled off a bit again, with product manager Aaron Greenberg telling Reuters "Xbox is not currently in talks with Sony or the Blu-ray Association to integrate Blu-ray into the Xbox experience".
Microsoft has announced its latest gadget that will complement consumers digital lifestyle today- the Windows Laser Desktop 7000. Designed to complement Windows Vista with its sleek design, the Desktop 7000 is composed of a wireless keyboard and mouse.
You would think that knife blade technology had reached its pinnacle a long time ago, but there are still inventors out there bound and determined to re-invent the wheel. Imagine if Crocodile Dundee whipped out a knife that was not only huge, but could also blast compressed air into an open wound—causing massive organ and tissue damage in the process. Now THAT would be a knife.
According to a report appearing in The Nikkei, Toshiba's HD DVD gamble will cost the company $986 million (100 billion yen) for this year.
The powers that be over at Nokia have officially dropped the price of their N810 tablet by $90, bringing it down to a slightly more affordable $389.99.
Konami has just released a new batch of Metal Gear Solid 4 screenshots, which show off some of the game's mechs.
SanDisk today introduced a new MP3 player it intends as competition to the iPod nano -- the new Sansa Fuze MP3 player. It's coming in April in 2, 4 and 8GB capacities for $79.99, $99.99 and $129.99 respectively.
Unlike its predecessor, StarCraft II offers "custom 3D-graphics engine with realistic physics and the ability to render several large, highly detailed units and massive armies on-screen simultaneously."
In the hopes of catching up with its rival social networking site in terms of localizing strategy, Facebook has launched a French language version of its site.
In American Gladiators for the NES, "the events were morphed into side-scrolling and overhead mini-levels that only partially resembled the real-life events."
Carnegie Mellon University researchers say you're still likely going to be distracted.
Joanna over at Laptop Mag just published an interview she held with Jerry Shen, Asus' CEO. She questioned him regarding the future of the Eee PC, and he sure did outline some interesting plans for future revisions. Jump for the low down on what Jerry Shen had to say.
Epson’s RX 595 all in one printer has it all. It prints, it scans, and can even read memory cards and print directly to CDs.
AT&T and Apple quietly introduced a new rate plan for the iPhone yesterday. Now you can get unlimited minutes, in addition to unlimited data, for just $119.99.
Hewlett-Packard and Acer have drawn on a strong retail presence to post growing market share of PC shipments, analysts said.
