Five years after selling social network Bebo to AOL for US$850m, Bebo co-founder Michael Birch has bought the company back for US$1m.
When Birch had spoken about Bebo being in AOL’s hands, he made it clear he felt AOL failed to make the most of the Bebo opportunity. In essence, he didn’t believe AOL properly understood what Bebo was.
“They changed CEO right after acquisition and I don’t think he bought into the vision so how could it succeed? It was never given that real chance to be what it could be. It reached rock bottom and was sold. But now I think with the right CEO and investors behind it, it could climb back,” he said at the time.
AOL bought Bebo, then one of the world’s most popular social networks, in 2008. At that time, Bebo had more than 40m users and was in third place in the world behind MySpace and Facebook at the time.
However, AOL sold Bebo to Criterion Capital partners two years later for less than US$10m.
Birch, who has been active as an investor and in particular focused on his Charity: Water project, returned to Bebo as a strategic adviser and invested in the company. “The new owners have put in a lot of effort and focus; they’ve made some good hires on the product and engineering front. I can never see it overtaking Facebook but there’s a niche it can carve out,” he said at that time.
However, since then Bebo’s future once again seemed in doubt, with an unexpected outage even convincing Birch that the social network had floundered. It was a false alarm but indicated nevertheless that all was not going swimmingly.
Now Birch has acquired the brand from Criterion in order to have a greater role in its destiny.
Last night, Birch tweeted: “We just bought Bebo back for $1m. Can we actually re-invent it? Who knows, but it will be fun trying …”