The acquisition of Bebo by AOL came as a bit of a surprise for the market. Bebo is certainly attractive as one of the leading social networking sites : in the top 3 in many countries, with its 40 million users globally, trailing only Facebook and MySpace (it was especially a hit in countries like the UK, where it gathers more than 1o million people).
Unquestionably, the buildup of Bebo was extremely smart. Even in the recent platform battle, they managed to be both interoperable with Google’s OpenSocial, and nevertheless have a Facebook-like syntax that allows developers to port applications to their platform more easily.
So this could be very valuable to AOL if they want to have a significant foothold in this new social networking world. After all, News Corp ended up very happy of its $580 million acquisition of MySpace in 2005 (the value of MySpace is now estimated north of $10 billion).
Of course, many commenters thought that AOL had better things to do. Jeff Jarvis puts it harshly :
AOL [...] is where innovations go to die. Remember Netscape ?
While some commented on how the founders’ alleged 70% ownership in this deal has earned them 380 million euros, or how their VC Balderton has earned $140 million (a 15 times multiple), or why it’s still a good buy for AOL (see Fred Destin’s post), I found more interesting to take a closer look at their career track. Michael and Xochi Birch met at Imperial College in London (at Southside Bar, according to a trustable source). They developed a number of sites, the first being failures, then increasingly successful, proof that they adjust and learn to get further…
They launched BirthdayAlarm.com in 2001, which quickly reached millions of users based on this very simple premise. In the early days of social, in 2003, they launched Ringo.com, which they sold too quickly within a year. They probably had seller’s remorse, realizing that it was just the beginning of the social networking wave. Since they had an 18-month non-compete agreement, they had to wait until 2005 to launch Bebo, but turned that late entry in the game into an advantage by pushing it as “second generation” social network (they also found the time to “startup” two children among all of this, which is quite a feat).
Although their office is in San Francisco, they are perceived (at least in Europe), as a european-based (or -born) social network, that has turned into a global success.
So what will be Michael Birch’s next big thing ? (after a well deserved vacation) Depending on whether you listen to his page on Bebo or to a Guardian interview from last year, it might be in the mobile world, or … to build a Atlantic Tunnel, following the example of the English Channel Tunnel…
In either case, we’ll try and followup on that next story.
Update : Coverage from the AOL-Bebo conference call from CenterNetworks reports than Bebo will be focusing on expansion in 5 new countries in Europe.
For those who don’t know, Atomico is the investment arm started by Niklas Zennström and Janus Friis (Skype founders), with their payday from the eBay acquisition. Atomico is a new breed of player in the European (and global) investment scene, the kind of player that will step up and fill the void left by 3i.
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