Bebo named hottest pre-IPO player

14 Mar 2007

Bebo has been crowned ‘hottest’ pre-IPO overseas technology company by top industry analysts at the UK Technology Innovation & Growth Forum 2007.

This win for Bebo suggests analysts have tipped the social networking giant for a public flotation.

This also suggests that Bebo has found itself at an interesting crossroads whereby it can focus on maintaining growth and reaching profitability or potentially succumb to an acquisition by a major media firm.

In 2006 the social networking site MySpace was bought for US$580m by News Corporation, a media giant headed by Rupert Murdoch. Bebo can also look to other sites such as Friendster who chose to stay independent and turned down a takeover bid by Google in 2003.

The secret to Bebo’s success is its blend of social networking and Web 2.0 technologies. From the user end, it is free, easy to use and users can customise the appearance, post messages, upload photos, watch videos, listen to new bands and add widgets.

This explains its popularity with connected teens but how does this translate to profitability? Bebo has lucrative partnerships with online companies that provide content and advertising, such as YouTube, and Skype.

These companies supply video, picture and audio content while organisations like eBay, NBC and Disney have cut advertising deals. Bebo generates income from both traditional advertising and engagement marketing.

While Bebo maybe riding high on a wave of popularity, it remains to be seen how long it can maintain this momentum amidst a climate of copyright actions by aggrieved media owners.

It emerged yesterday that media conglomerate Viacom is taking a US$1.27bn lawsuit against YouTube for what it alleges is “massive intentional copyright infringement” and it may only be a matter of time before Bebo gets a slap on the wrist too as users often post YouTube material on their pages.

By Marie Boran