AOL acquires Bebo for 850 million

[DarrenStuart]

http://www.centernetworks.com/aol-acquires-bebo-850-million

[fleaflicker]

AOL is a massive company desperate to stay relevant.

A good look at their internal dysfunction and struggles over "Platform A" was published yesterday in the NY Times:

http://www.nytimes.com/2008/03/12/technology/12aol.html

[iamelgringo]

Hmmm... so, AOL paid $850 M for 3.5 million visits a month. That means that they're paying about $250 a user.

At the same valuation per user, that values Facebook at a paltry $ 7 billion.

Another thought... if users are worth $250 a piece, maybe my blog that has 100 readers a month might actually be worth $25,000! Anyone wanna buy it? :)

[xirium → iamelgringo]

This type of valuation has been mentioned before ( http://news.ycombinator.com/item?id=121206 ).

Yahoo purchased GeoCities for US$1100 per user. Microsoft purchased a stake of Facebook for US$300 per user. So, AOL buying Bebo for US$250 per user is a relative bargain.

Regarding your blog, its only worth US$25000 if you can sell it. Otherwise it is worth nothing.

[aston → xirium]

>> Microsoft purchased a stake of Facebook for US$300 per user and an exclusive advertising deal.

fix'd.

[ojbyrne → iamelgringo]

That's US visitors. They're based in the UK and that's where they've been most successful. Techcrunch says 22 million uniques.

[aneesh → iamelgringo]

Want to pay me $249 to read your blog? :)

On a more serious note, the average facebook user spends more time on facebook (and views more pages, ads, etc) than the average reader spends on your blog.

[wallflower]

AOL has some cash flow - about 9 million subscribers paying $10-$25 for Internet access monthly (http://tinyurl.com/ytnz3d)

[henning → wallflower]

so they're roughly on par with World of Warcraft, except they have a much weaker brand?

[samwise → henning]

kinda sad when you put it that way.

[alaskamiller → samwise]

except, you know, not... when you factor in their push into online advertising and consolidation/acquisitions as well as their publications.

[staticshock]

i've tried reading up on "engagement advertising", but i continue not to understand it. it seems like a fairly empty buzzword for saying that the ads will be micro-targeted (maybe via social networking information you've revealed, like facebook's attempts?), which, to my knowledge, is a concept that hasn't seen much success yet.

[poppysan → staticshock]

Engagement advertisement is an idea that I think successfully addresses the problem of click fraud. Instead of just measuring clicks or impressions, they would base the results on a desired user experience. Hard to do and track also, imho.

[whacked_new]

As per the YouTube acquisition, perhaps there will be a new surge in social networks! The talent pool proceeds to filter itself.

[omnipath]

I thought AOL didn't really have any extra cash laying around? Where did they get the money?

[xirium → omnipath]

You don't need cash to acquire companies ( http://www.billparish.com/citigrouppyramidintro.html ).

[DarrenStuart → omnipath]

I dunno they seem to be buying a lot of stuff recently so they must have some cash.

Don't forget its time warner as well isn't it?

[omnipath → DarrenStuart]

Yeah, apparently, according to wikipedia, Time Warner is thinking about splitting 'AOL internet access and adversting businesses into two, with the possibility of later selling the internet access division.' So they haven't done it yet.