Another acquisition bites the dust

The latest to fail in the world of online mergers and acquisitions is the social networking site Bebo. It was once the most popular website for teenagers, but now it faces a complete closure by the end of this year. Bebo’s demise has been put largely down to the failure of AOL’s willingness or ability to fund the site which has now made it impossible to compete with the likes of other social networking giants Facebook and MySpace.

Recent figures show that Bebo’s global unique visitors in February totalled 12.8 million against Facebook’s whopping 462 million. MySpace totalled 110 million and Twitter 69.5 million. Bebo’s stats were 45% down on last February.

The result of the acquisition by AOL led to insufficient investment and when compared to Facebook, who at any given time have 2, 000 engineers working on the site to keep it running effectively, Bebo had just 40; it is not difficult to see one of its downfalls.

In its heyday, Bebo attracted a host of direct response advertising companies all keen to participate in features like the well publicised web video dramas like KateModern. This was a strategy that worked well and also saw the site attract media focus and ultimately led to a more attractive sale. However, since the acquisition it has lost the vital investment and impetus to keep up with the big boys and this, coupled with a gradual reluctance of top UK Advertising Agencies to continue to commit to any length of advertising campaigns, has led to their ultimate demise.