Bebo Financials
Today's big news is AOL's acquisition of Social Network Bebo for a cool $850 million. Kara Swisher has an excellent piece detailing some of the financial aspects of this mega-deal. She also notes that despite some significant success in the space, Bebo is very much in the shadow of Myspace and Facebook as a social network.
With only $5 million in EBITA for 2007, Bebo is selling at a whopping 160+ times earnings. Big companies tend to do be viewed more favorably than small ones by this EBITA multiple metric, but it is notable that with small and moderate sized website dealings one would expect to pay only about one or two times annual earnings rather than paying in the tens or in this case over one hundred times annual earnings.
This discrepancy is in part due to the fact that large sites are arguably more stable than small ones, but in my opinion this is still a very conspicuous aspect of wheeling and dealing with online companies, and arguably yet another indication that internet bubble two may be ... growing ever larger.
One has to be middle aged to remember when AOL was pretty much the *only* big game in town in terms of online socializing, and I'm sure AOL execs are wishing they had managed to turn more of that early chat room activity and idle banter into a thriving social network like Myspace or Facebook or Bebo.
Can Bebo help AOL regain the former glory it enjoyed in the early days of online activity?
With only $5 million in EBITA for 2007, Bebo is selling at a whopping 160+ times earnings. Big companies tend to do be viewed more favorably than small ones by this EBITA multiple metric, but it is notable that with small and moderate sized website dealings one would expect to pay only about one or two times annual earnings rather than paying in the tens or in this case over one hundred times annual earnings.
This discrepancy is in part due to the fact that large sites are arguably more stable than small ones, but in my opinion this is still a very conspicuous aspect of wheeling and dealing with online companies, and arguably yet another indication that internet bubble two may be ... growing ever larger.
One has to be middle aged to remember when AOL was pretty much the *only* big game in town in terms of online socializing, and I'm sure AOL execs are wishing they had managed to turn more of that early chat room activity and idle banter into a thriving social network like Myspace or Facebook or Bebo.
Can Bebo help AOL regain the former glory it enjoyed in the early days of online activity?
Labels: AOL, bebo, Facebook, MySpace, social media, Social Networking, social networks
posted by Joseph Hunkins at 3:37 PM
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2 Comments:
I think AOL's aquitision of bebo portends the end of bebo…
http://webpoet.wordpress.com/2008/03/13/bebo-aol/
TWL
I guess AOL figured owning a destination site would might give them a quicker return on the billions they sunk into the online ad space so they shelled out $850 million for Bebo.
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