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As Drama 2.0 pointed out recently, AOL is starting to think it may have paid too much for Bebo.

The recent sale of Virgin Radio for 'just' £53m seems to confirm that.

This week saw the sale of Virgin Radio by Scottish Media Group (SMG) to a subsidiary of Indian media company Bennett Coleman & Co for the bargain basement price of £53 million.

The price seems particularly low when you consider the fact that Chris Evans pocketed £225m when he sold Virgin radio to SMG in 2000 (having bought the station for £85m - and people say Evans is stupid?)

Another factor that seems to suggest that the aptly named TML Golden Square (Virgin's offices are in Soho's Golden Square) got a bargain is when you consider how much AOL recently paid for Bebo.

As Drama 2.0 pointed out recently, some at AOL are now wondering whether, at $850m (£431m) they paid over the odds for the social network.

Whether they did or not is up to the analysts to work out, but Virgin's digital strength certainly suggests that TML Golden Square should be feeling pretty pleased at the price they got.

I remember reading a while back (but can no longer find the article) that Virgin Radio had been found to be the most popular online radio station in the world.

And I have to say from personal experience that I know of a lot of people in the US & Australia who regularly tune in to Virgin online. Now bear in mind that these are often, as many of my friends are, often web geeks, who could be plugged into Pandora, last.fm or a similar whizzy web app.

But instead they prefer to listen to an old fashioned radio station where a DJ chooses the songs, rather than listen to a 'personalised radio station' based on their listening habits.

So if you consider that Virgin obviously has a very healthy web audience, and that it carries advertising, doesn't it seem like this could be a very good deal? There are however two major stumbling blocks that I can see to maximising all of this traffic.

Firstly is the fact that much of the traffic is based overseas, and Virgin is a UK based company, selling to British companies with no interest in foreign consumers. But the recent launch of companies such as AdGent 007, which sells international traffic on behalf of publishers, suggest that this may not be a problem for much longer.

Possibly the bigger problem may be the fact that within a few weeks Virgin Radio will no longer exist.

Because, as part of the deal, TML Golden Square will lose the right to use the Virgin brand name. And whilst companies like Google & Facebook have shown that creating a powerful web-brand from scratch isn't impossible, there are also plenty of other long-forgotten companies that prove how hard it can be.

Ciaran Norris

Published 9 June, 2008 by Ciaran Norris

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