British Bebo founder buys back social network for $849m profit

"Buy low, sell high," is the investor's mantra. Michael Birch, the British founder of Bebo, has just amply demonstrated that principle by spending a piddling $1m to buy back the social network he sold to AOL for $850m five years ago. We just bought Bebo back for $1m. Can we actually re-invent it? Who knows, but it will be fun …

[Turtle]

Large. Stupid.

"A few months later global financial markets imploded, a collapse in the economy followed, and suddenly that $850m price tag looked ridiculously large in light of Bebo's deficiencies."

Newsflash! The price looked "ridiculously large" as soon as it was broached. There was never a moment that it looked anything other than "ridiculously large". Or "ridiculously stupid". It would have looked that way had the price been a fraction of $850m.

Too bad AOL didn't have a sanity clause written into the contract: they could have then have Randy "Der Kommissar" Falco* declared mentally (well, and "professionally" too) incompetent, and so voided the contract and annulled the deal - thereby saving themselves huge amounts of money and self-esteem!**

"The couple ... are building a luxury members-only drinking and discussion club in San Francisco..." Might be worth going if - and only if - they can resist the temptation to let themselves join.

*Maybe that was a different "Falco". Not really sure.

** Some people contend that there ain't no sanity clause. In this case they were right, apparently.

[Anonymous Coward]

Re: Large. Stupid.

You're ripping on the founders because AOL were dumb enough to cough up 800m? What should they have done, said, "Oh, we couldn't possibly take more than 10 million!"?

[Turtle]

@David W.: Re: Large. Stupid.

"You're ripping on the founders because AOL were dumb enough to cough up 800m?"

Perhaps you could explain to me, just for the sake of a bit of amusement, exactly how you derive the idea that I was ripping the Birches from my post. I know it can be difficult to follow pronouns and their antecedents, for people with certain kinds of learning disabilities. Unless, of course, English is not your native tongue...

[Anonymous Coward]

Re: @David W.: Large. Stupid.

"Perhaps you could explain to me, just for the sake of a bit of amusement, exactly how you derive the idea that I was ripping the Birches from my post."

Well, you wrote:

"Might be worth going [to Birches' club] if - and only if - they can resist the temptation to let themselves join."

Now, I recognize that I'm but a lowly philistine, but that doesn't strike me as being particularly complimentary. But maybe you're just too subtle for my dull American wit.

[Anonymous Custard]

Re: Large. Stupid.

@ Turtle

*Maybe that was a different "Falco". Not really sure.

One would hope so, the Austrian musical one died in a car crash in 1998.

Then again given what happened to Bebo after the AOL purchase maybe the mix-up is understandable.

[Anonymous Coward]

This post sponsored by Maltesers

"One would hope so, the Austrian [Falco] died in a car crash in 1998."

Where was Randy Falco born? Malta?

If so, I guess that'd make him The Maltese Falco...

[tony2heads]

Re: Sanity Clause

Chico Marx in 'A Night at the Opera'

"You can't a fool a me there ain't no sanity clause"

http://www.youtube.com/watch?v=KS2khYJZKwA

Brilliant film.

[Anonymous Coward]

Re: Sanity Clause

"Sanity Clause" was also the title of a Christmas single released by British punk band The Damned in 1980. It was a fine record in my humble opinion, but didn't even make the top 40.

[Spoonsinger]

Re: It was a fine record in my humble opinion. WTF?!!!?

What kind of punk comment is that? (Apparently this comment has to be rephrased at this point, but the letters c & t were involved with an exclamation mark somewhere at the end, and one or more of the following letters 'u' & 'n').

[Spoonsinger]

Re: It was a fine record in my humble opinion. WTF?!!!?

Actually not I've thought about this. FUCKING Johny douche bag moderator fucking did my head in with their fucking douche bag middle class fascist moderating crap. FUCK THEM!!!!!!

(I now know how Eadon feels everyday - but in a totally justified sense).

[Rol]

Local shop, for local people

It would be nice to have a British/European social network, stored on a British/European server, answerable to British/European laws and dare I say, paying British/European tax if it makes a profit.

After recent revelations regarding privacy and taxation I think a knee jerk (in the groin) reaction is on the cards.

We need to wean ourselves off America's ITeat and "bring I.T. back home"

Well that's the slogan sorted, just need to rally the masses on err, erm, Facebook...oh bugger, we're screwed.

[Anonymous Coward]

Re: Local shop, for local people

Based on my understanding of British libel and obscenity laws, I think I'd rather host a social networking site in the NSA's server room...

[Anonymous Coward]

Re: Local shop, for local people

Based upon my experience of British server hosting, I would much rather have a pigeon drop me a daily digest to read with my morning cup of tea. It would be considerably faster.

[Anonymous Coward]

Re: Local shop, for local people

Based on my experience with pigeons, I would much rather the mail be delivered by the government, they're far less likely to shit all over me... oh wait.

[Bigg Phill]

Re: Local shop, for local people

"Based on my understanding of British libel and obscenity laws, I think I'd rather host a social networking site in the NSA's server room..."

Yes because nobody in the UK has been prosecuted by those laws for posting on an American based service like Facebook or Twitter have they...

[Anonymous Coward]

Re: Local shop, for local people

"Yes because nobody in the UK has been prosecuted by those laws for posting on an American based service like Facebook or Twitter have they..."

Not the people who own or run the service though; which was the would-be owner's concern that we were discussing.

[Fred M]

Re: Local shop, for local people

I think Bebo was an excellent example of how the UK is not the place for social networking. I'll give you a short history lesson of social networking...

Many years ago (early 2001) some friends and I started the first ever social networking site - the long forgotten EveryonesConnected.com - well before MySpace, Friendster, Bebo, etc. Being based in the UK we found that UK venture capital was too sensible and cautious to invest. The term social networking wasn't even being used and they couldn't see any exit strategy. [Sidenote: Is there one?] Anyone in the US couldn't see past their shores and weren't interested in anything that wasn't physically US-based.

Shortly afterwards the Birches (who ran Birthday Alarm) started Ringo, which I also believe was UK-based. I can't find anything to confirm this so I'm relying on my memory, but I remember that the Birches shut up Ringo, moved to the US and started Bebo. They seemed to immediately get investment and interest. That kind of supported my suspicion that being US-based was essential if you were going to make a financial success of it.

[Anonymous Coward]

Sour grapes much?

"That kind of supported my suspicion that being US-based was essential if you were going to make a financial success of it."

Yeah, AOL made such a financial succes out of BEBO and you're berating UK investors for having the sense not to invest in something that has been proven to be a major loss making scheme?

[Rol]

Re: Local shop, for local people

While I agree with your comment, times have moved on, they have the money, the experience, a positive track record and financiers now recognise the potential.

Add in the negativity surrounding FB.

Plus the drive of an entrepreneur unshackled from tedious bean counters.

And considering the benefit of cross platform interoperability between the smaller players as suggested by monkeyfish, a few posts later.

It might not rock FB's foundations, but it would certainly trim its lofty peaks.

[Joe Harrison]

Re: Local shop, for local people

Very late 90's and early 00's every single work-experience kid in our office was obsessed with faceparty.com so surely they were one of the very first. It was THE social network (if you were a teen.)

[Anonymous Coward]

Re: Local shop, for local people

You had to pay to look at the nudie pictures people posted though.

Facepic was a more free version.

[Jamie Kitson]

First ever social networking site?

@Fred M

> Many years ago (early 2001) some friends and I started the first ever social networking site

erm, I think you'll find FriendsReunited came before that.

[Fred M]

Re: First ever social networking site?

Friend Reunited was indeed before 2001, but wasn't social networking. In fact I had a meeting with Friends Reunited to discuss collaborating on them developing the social networking side of things.

[John Smith 19]

"Superstar" CEO's and their (allegedly) coke fuelled M&A advisors = company down toilet

Logic says this is a stupid move.

After all old owner acts as "advisor" and company goes from $10m -> $1m is not too impressive "advice."

Unless of course he was setting them up to sell him it knowing exactly (in principal) how to fix those problems.

Which makes him a sneaky f**ker and therefor exactly what's needed to bring a business back to life.

Ladies & gentlemen. Collect your popcorn bowls, sit back and enjoy the fun.

[Piro]

Haha, AOL

Who'd have bought Bebo for that much? Isn't it just a godawful site filled with illiterate teens?

[Anonymous Coward]

Re: Haha, AOL

Pretty much, it's the internet for chavs.

[Lloyd]

$849m profit????

Are you sure? I find it very unlikely that he financed Bebo all by himself, isn't it more likely that he started it and on selling it he received a percentage of the sale price, the rest going to investors?

[Anonymous Coward]

Re: $849m profit????

You didn't read the whole article did you? Says he got $595 million for his holdings.

[Lloyd]

Re: $849m profit????

So, the answer to the question is "yes the headline is incorrect" then? Thank you for clarifying, I didn't need to read the article to know that it was wrong.

[Dapprman]

Re: $849m profit????

Out of the $595 they gave chunks of it to their staff and while comapred to the over all total it would not heave been much, many of the original staff became millionaires. A friend of mine who had been there for about 8 months as a mid to senior level techie was given well in to 6 figures (sterling).

[monkeyfish]

Here an idea for you:

Make a social network that works like email. I can any email account I like and still email you on some other email account provider and it all works perfectly well together. Start a network that lets users choose what network to be with, but then still connect to people using any other social network they happen to be on. Obviously it would take some standards/collaboration, and the likes of FB and G+ wouldn't be interested. But maybe if all the others clubbed together they could take down the beasts?

[Rol]

Re: Here an idea for you:

And many strokes, though with a little axe, Hew down and fell the hardest-timbered oak.

[BeerTokens]

Re: Here an idea for you:

yep I was thinking along these lines the other day. But a little more drastic. take a £200 synology NAS, (any nas that has a LAMP install) pop this next to your router, config the IP for it.

load on my 'never been created but the packages are out there so shouldn't be too hard for someone who knows what they're doing' messaging centre software and you instantly have the following services;

Cloud Storage (synology has this already init but may need tweaking)

Email (pop 3 and web based)

Photo hosting

online back up (point this one at one set up at a family members and mirror between the two or more if you want)

Social network (add friends IP's to see their stuff on your wall 'rss' could do this)

radio play (see synology web site)

music streaming in the home but also off line

All info in your own home backed up at a friends in your control.

It only popped in my head last night and could do with a lot of polishing.

would you pay the £200.00 to be part of the next big thing?

Would you pay £200.00 to know who has your data and what was being done with it?

as a open source project it would just be as easy to install on any old PC you can chuck LAMP on just with the NAS boxes it would all be auto-magical.

[Steen Hive]

Re: Here an idea for you:

Eh, disapora?

[BeerTokens]

Re: Here an idea for you:

yeah, looks like that, as with all my ideas a quick google and it shows that someone has beaten me to the punch, some times only by weeks, sometimes years, more often than not decades!

Back to the menial low paid job for me then...

[Anonymous Coward]

Re: Here an idea for you:

Someone has tried the "open" social media idea. It hasn't taken off, the code was terrible initially (so much for open source) and it has a name that is about as catchy as diarrhoea.

http://en.wikipedia.org/wiki/Diaspora_%28social_network%29

[Mr Spock]

" ...the Bebo users deserve better that what they have received in the past few years."

No they don't. They deserve exactly what they have received in the past few years.

[Mystic Megabyte]

get'em early

I envisage a site for foetuses, a sort of watery based homepage where they all float about "friending" each other and posting about how roomy their womb is. Location.location, location an'all that.

Then later they can go all elitist by saying "I've been on Bebo from BD - 180 days don'tcha know".

What the heck was I drinking yesterday?

[Anonymous Coward]

Re: get'em early

"I envisage a site for foetuses" - Great idea!

How about OpenWomb.com, ePlacenta.com, InsideMumsNet.com, IndigoBeaver.com - please give me some equity if you use any of these domains and it works.

[luxl85]

Er I am glad to see that: after 5 years AOL buy it for 850M again.

[Anonymous Coward]

$850m seems a bargain

compared to $100 BIILLLLION

[Anonymous Coward]

Egads

Another Branson in the making.

[rcorrect]

Everyone signup for Bebo!

Let's see if they can do it again!