

That’s because there’s tremendous downward pressure on valuation because of the unproven business model, namely advertising. Will this start a frenzy of acquisitions in the space? I believe so, but not necessarily at this valuation. Excepting Facebook’s $15 billion inferred pricing thanks to Microsoft’s strategic investment (which puts it at roughly $300/user!), we’re starting to see a rough valuation for today’s social networks. That’s a bargain compared to the $27.62 per user price News Corp paid for MySpace back in July 2005. As Stacey Higgenbotham/GigaOM points out, the $850 million price comes out to about $21.25 for each of Bebo’s 40 million members. if I frequently IM someone, then that relationship is very strong and should be reflected in my Bebo experience if that friend is also there. The potential is that Bebo members’ social graphs and activities are expressed and connected to instant messaging, and that IM use is reflected in the nature and tenor of the relationships within Bebo, e.g. It didn’t go over well and I agree with Saul Hansell/NYTimes that this could be an opportunity to bring social networking into AIM and AOL in general. And yet, the buddy list of services like AIM reflect very well a key part of my social graph - the people with whom I communicate with in a very intimate, frequent manner.ĪIM introduced AIM Pages a few years ago, which was a lightweight approach to having a profile attached to an AIM screenname. Most social networking sites already have IM-like capabilities built into them, but the reverse isn’t true. Let’s start with AIM and ICQ, in the case especially for AIM, leading instant messaging platforms. The foundation of my premise is that social networks will be like air, integrated into everything that we do. With the $850 million acquisition of social networking site Bebo, AOL is finally showing its hand - a plan and way to integrate the disparate assets and acquisitions its been quietly building over the past year. But as an integrated part of the larger AOL content and ad network, it has amazing potential to play a role in how social networks develop.

That’s because as a stand-alone social network, Bebo had no chance of competing against big boys like MySpace and Facebook. In many ways, I think this deal represents how social networks will develop in the future. I have several points of view on what it means, and I’ve summarized some of the key ones below. AOL announced that it would buy social networking site Bebo for $850 million.
