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AOL will buy Bebo, a social networking site popular in the UK, for US$850 million in cash, the companies said Thursday.
AOL, which is owned by Time Warner, said it sees opportunities to make money from advertising on Bebo, which has about 40 million users worldwide.
AOL is the latest of the major online players to grab a piece of the social networking pie. Microsoft is working with Facebook to deliver advertisements, and media giant News Corp. owns MySpace, the widest-used social networking site.
The acquisition comes as AOL has undertaken steps to revamp its business model from being an ISP (Internet service provider) to a media and content company. It has been speculated AOL would be sold by Time Warner, and the company has struggled to reinvent itself.
AOL said it will integrate its online advertising technology, called Platform A, with Bebo. Platform A cobbles together innovations from several other AOL acquisitions, including Tacoda and Third Screen Media, intended to fill out its ability to deliver Web-based and mobile ads.
In the US, Bebo ranks third behind MySpace and Facebook, but is first in New Zealand and Ireland and is widely used in the UK, AOL said.
Bebo, a closely-held company, does not make public its revenue figures, which makes it difficult to gauge its financial success.
AOL Chairman and CEO Randy Falco defended the acquisition price. "In terms of Bebo, we think it's an excellent asset at a great price. We have a proven track record of spotting value," he said during a conference call.
Time Warner executives were "incredibly" supportive when AOL asked to go ahead with the deal, Falco said.
Social-networking sites such as Facebook and MySpace have been valued quite highly due to their wide user bases and potential for marketing and advertising. But the sites, which are free to join, are as of yet unproven money makers.
Bebo has looked to other ways to make money other than display advertisements. Bebo ran an online serial drama, "Kate Modern," and sold product placement slots to businesses. It has also let retailers such as Nike create themed marketing pages, which has proven to be a less intrusive way to attract interest from users.
One of the large looming questions is how social-networking sites will increase their revenue from advertising without frustrating users, who can always leave.
Facebook ran into trouble last year after a new advertising program, Beacon, caused a privacy outcry after users complained that it was too intrusive and stealthy in tracking their actions outside of the social-networking site. Facebook modified it twice to address the privacy concerns, some of which nonetheless persist.
AOL's Chief Operating Officer Ron Grant said the company plans to "supercharge" the monetization of the site. But Falco said AOL will be very careful about making changes that could reduce its user base.
Joanna Shields, Bebo's international president, said users only see one ad per page now. AOL plans to integrate its AIM and ICQ instant messaging applications into Bebo, Falco said.
2008 CIO Summit
19th August, 2008 Four Seasons Hotel, Sydney Developed in partnership with CIO Magazine, IDC, INTEP and the CIO Executive Council.
The world of the CIO is extremely complex and diverse. Multiple priorities demand attention and decisions are needed instantly. Individual teams need to be driven towards common goals, and businesses strive to become more mobile, agile and responsive. For CIOs, the challenge never ends.
Every year the CIO Summit identifies what is top of mind for CIOs across Australia and New Zealand, and offers insight for CIO benchmarking and vendor strategic planning alike.
Recent IDC research shows that over 59% of CIO's believe that 'to achieve their business strategies, technology should be used more aggressively than today.'
Join us on August 19th to discover how this is possible with the latest technologies including Virtualisation, Web 2.0, IP Surveillance and Software as a Service (Saas).
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Please email Denyse_Robertson@idg.com.au for further information.
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CIO Live Podcast #79: Brent D Taylor, author of The Outsider's Edge: The Making of Self-Made Billionaires Part II 05 October, 2007 06:00:00
For his new book, The Outsider's Edge: The Making of Self-Made Billionaires, social researcher Brent D Taylor spent four years of intensive research investigating the psychological make-up and backgrounds of some of the world's richest men and women, including IT luminaries Bill Gates, Larry Ellison and Steve Jobs. Taylor discovered that, despite working in different industries and coming from different upbringings, they all have one thing in common -- they are all outsiders. - +
CIO Live Podcast #78: Brent D Taylor, author of The Outsider's Edge: The Making of Self-Made Billionaires 28 September, 2007 17:34:25
For his new book, The Outsider's Edge: The Making of Self-Made Billionaires, social researcher Brent D Taylor spent four years of intensive research investigating the psychological make-up and backgrounds of some of the world's richest men and women, including IT luminaries Bill Gates, Larry Ellison and Steve Jobs. Taylor discovered that, despite working in different industries and coming from different upbringings, they all have one thing in common -- they are all outsiders. - +
CIO Live Podcast #77: Panasonic Speeds Up Trans-Pacific File Transfers, Part III 21 September, 2007 07:00:00
Part three in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance. - +
CIO Live Podcast #76: Panasonic Speeds Up Trans-Pacific File Transfers, Part II 14 September, 2007 07:00:00
Part two in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance. - +
CIO Live Podcast #75: Panasonic Speeds Up Trans-Pacific File Transfers, Part I 07 September, 2007 07:00:05
Part one in our three-part special report from CIO's sister publication Network World in the US, as Paul Desmond reports from the Network World IT Roadmap Conference in Santa Clara, California. With development teams in the US and Japan, Panasonic needed a more efficient way to move very large files between the two locations. Iben Rodriguez, IT consultant for Panasonic Research and Development, explains how a storage-area network and virtual server technology helped speed up WAN performance.
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Best Western forced to play defense on data breach disclosure 29 August, 2008 08:08:00
Could hotel chain have done a better job of defusing story about system intrusion?The headline in this week's Glasgow Sunday Herald -- "Revealed: 8 million victims in the world's biggest cyber heist" -- was a grabber. - +
US Terror threat system crippled by technical flaws 28 August, 2008 09:53:00
US Congress charges that US$500m project to prevent another 9/11 is a complete failure.A US House subcommittee is charging that a US$500 million IT project intended to "connect the dots" on terrorists and help prevent another 9/11 is a failure; it can't even handle basic Boolean search terms, such as "and, or and not." - +
Malware infects space station laptops 28 August, 2008 08:15:00
Not the first time, says NASA; astronauts load up Norton AntiVirusMalware has managed to get off the planet and onto the International Space Station, NASA confirmed yesterday. And it's not the first time that a worm or virus has stowed away on a trip into orbit. - +
Separation of duties and IT security 28 August, 2008 09:40:00
Muddied responsibilities create unwanted risk. Kevin Coleman says auditors may start labeling poorly defined IT duties as a material deficiency.Separation of duties is a key concept of internal controls and is the most difficult and sometimes the most costly one to achieve. This objective is achieved by disseminating the tasks and associated privileges for a specific security process among multiple people. - +
How to recruit and retain the best young security employees 27 August, 2008 08:32:00
Today's youngest generation of workers, known as Generation Y, have different career goals than their parents did. What do you need to know to get them to work for you?The final installment in a series of articles about generational differences and security. Part one looked at managing workers in different age groups. Part two examined the types of security concerns that are most commonly associated with different generations in the general workforce. This article provides recruiting and retention advice for security employees.
Tumbleweed appoints O2 Networks to its Australian Channel Partner Program 29 August, 2008 12:31:00
HP ProCurve Brings Big Business Gigabit Switching Features to Small Businesses 29 August, 2008 12:00:00
GlobalConnect Provides Treatment for Healthcare Provider’s Contact Support Requirements 29 August, 2008 09:59:00
Sybase and Logica Partner To Mobilise The Supply Chain 29 August, 2008 09:47:00
New global landscape for qualitative researchers with Spanish and Chinese software releases 29 August, 2008 09:34:00
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Dude! You Say I Need an Application-Layer Firewall?!
Proxy firewall technologies have proven time and again to be more secure than “stateful” firewalls. They will also prove to be more secure than “deep inspection” firewalls. High-performance proxy firewalls are available today which are easily capable of handling gigabit-level traffic. Discover more by reading on.
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