When it comes to large tech companies and how they've fared with social networking, one could argue that Microsoft is the most successful.
Google has struggled to build viable homegrown social networks, Yahoo has largely done little of note, AOL purchased Bebo for $850m only to drive it into the ground, etc.
Microsoft's claim to success in the social space? A $240m investment in Facebook in 2007 which valued the social network at $15bn.
It's official: after more than a year of rumors, AOL has finally managed to find a buyer for Bebo, the social networking website it purchased in 2008 for a whopping $850m.
The buyer: financial firm Criterion Capital Partners. The price: word on the street is that it didn't exceed
$10m, and may have been as low as $2.5m.
According to CEO Tim Armstrong, AOL is probably the largest newsroom in the world. With a staff comprised of 4,000 journalists, it's hard to quibble with that estimation.
But over the next year, AOL will have to make a lot of changes if it wants to follow through on its new brand promise to "beat the internet."
As a bit of a statistical nerd, I like to keep an eye on the latest statistics on social network usage. Anybody who reads the Tamar blog will know that I regularly report on how Facebook in particular is growing, but until recently I had very little to compare it against.
Finding accurate and up-to-date information on MySpace is nye-on impossible (unless I'm missing a trick?) and Bebo proved fairly hard to find as well. We've all heard that Bebo is supposed to be the social network of choice for kids, and Facebook proves much more popular for the older generation, but do the numbers back this up?
The tough economy has led to an uptick in advertising experimentation online, but one thing that publishers have not approved is also on the rise — ads imbedded with malware.
Websites have long taken to selling their advertising through a number
of different strategies, including but not limited to in house salesmen,
ad networks and exchanges. But the diverse and varied nature of online ad selling has its own set of
concerns for publishers, now including the threat of viruses.
It's not the best time to be an internet entrepreneur if you need funding. Thanks to a global recession, investment is pretty hard for most new startups to come by.
In the United States, which has the most robust VC market, investments by VCs plummeted in Q1 2009, reaching their lowest level in 12 years. VCs are focusing on their existing investments, being far more conservative when it comes to making new investments and are increasingly asking more of entrepreneurs, both in terms of investment criteria and deal terms.
In December 2005, ITV purchased social networking pioneer Friends Reunited for £120m plus an earn-out of £55m. At the time, Friends Reunited had 46m registered users, an impressive number that made the husband-and-wife creation one of the largest social networks in the world.
As competing social networks like Bebo and Facebook gained prominence, Friends Reunited stuck to a subscription model. And despite losses in users and traffic, the service pulled in £22m in 2007, making up a hefty chunk of ITV's online revenue.
Less than a year ago, AOL acquired Bebo for $850m in cash in what is today still one of only a handful of major Web 2.0 acquisitions.
Our resident skeptic, Drama 2.0, criticized the deal and called the suggestion that AOL may have overpaid for the popular social network the "understatement of the year".
Who said that funding wouldn't be available to startups in the downturn?
Balderton Capital, which was formerly Benchmark Europe, made $140mn
when portfolio company Bebo was sold to AOL and a small fortune when
another portfolio company, MySQL, was sold to Sun. Its other
investments have included Betfair, the UK's most popular betting
exchange, and Yingli Solar, a Chinese solar company that is now public.