I continue to see articles concerning AOL’s slow implosion in the press. The latest in the salvo concerns the management at AOL consideration of shedding Bebo. AOL bought Bebo for $850 million two years ago, while they were still a part of Time Warner Inc. Bebo was an important piece of their transformation plan in which AOL wanted to move away from being a subscription based service for Internet access to a media business generating ad-supported revenue. When a business with the resources of a Time Warner makes a billion dollar bet and fails to monetize, one must wonder if they performed the proper vetting process or were they simply following the herd.
This is not the first failure in the firm’s acquisitions; Buy.at was recently jettisoned for $17 million after paying $125 million in 2008 for the dgital ad firm. Will its instant messaging service ICQ be next? When will the shareholders demand better stewardship from the leaders making these bets?
The small to medium business (SMB) owner would not survive if they followed the herd at each new fork in the technology path. SMBs must be better shepherds of their funds than the large public companies that they compete against, if they want to survive and flourish. So how does a SMB determine when to launch a social media campaign and which platform? Many variables must be considered such as these outlined in a recent blog post. When you are ready and have performed your due diligence, give us a call and hear how we can help you to make the correct bet.
Back in March, AOL decided to jump on the social media band-wagon and buy a popular social media website, Bebo.com. According to the Bebo website, they are,
“… a social media network where friends share their lives and explore great entertainment.” For AOL, this is a significant purchase and one wonders whether it will pay off and propel AOL into social media heaven. Bebo, in terms of unique visitors to the site in the U.S., ranks far behind competitors MySpace and Facebook. Even in the U.K. where Bebo was the most successful, popularity has been lagging recently which has caused some higher-ups at AOL to get a little concerned.
One huge advantage AOL will have with Bebo is that Bebo already has a popular instant messaging platform. If integrated with AOL’s instant-messaging, the AOL/Bebo partnership would rival the presence of both MySpace and Facebook as they could potentially reach over 100 million unique visitors. This would make it one of the most powerful social networking platforms ever conceived and would make AOL one of the major players in the battle for social media supremacy.
One problem AOL could face with their expansion of their social media presence is with the advertising. The advertising industry is still not fully convinced that social media sites are the way to go and have been very reluctant thus far with their ad spending on sites like MySpace, Facebook and Bebo. One thing is for sure, however, that over time, the mainstream popularity of social media is on an upward trajectory and advertisers would be missing out in a big way if they didn’t pump up the spending.
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