Do You Get The Mysterious Moves Of Bebo And Vevo?
Mysterious moves this week: founder Michael Birch bought back his social network Bebo from AOL and music video platform Vevo sold 7% of its shares to Google’s video giant YouTube. Maybe I can unravel the mystery for you?
Bebo co-founders Michael and Xochi Birch.
Facts are that Michael Birch bought back Bebo for $1 million, 5 years after he sold his social network to AOL for $850 million.
Vevo sold 7% of its shares to YouTube for around $50 million, 4 years after Sony Music and Universal over $200 million in the music platform.
Remember the dance around MySpace, Friendster and Hulu? Right, we might have spotted a trend for you here.
The Mystery of the Bebo Buyback
Why would AOL be selling Bebo for $1 million, when they purchased the social network for $850 million in 2008?
The same question I recently asked Walt Disney, News Corp and Comcast: Why are you selling Hulu?
We could ask Rupert Murdoch similar question: Why did News Corp. pay $580 million for MySpace ending up selling the company for $35 million?
What about the VCs that pumped almost $50 million into Friendster, in order to sell the firm for barely 50% of that amount?
LinkedIn, Twitter and other special interest social networks (or should I call them interest graph, not social graph?) prove that you don’t have to be the biggest to survive. Sorry dear media agencies, big is only good when smart.
MySpace of course can also create its own place as music network, but News Corp thought it was going to be a social network like Facebook, and overpaid a lot.
Bebo however is no interest network. It is a bad clone social network, replaced by Facebook. So Birch will need to re-invent Bebo and he thinks he can.
I think it will be extremely difficult, since Bebo is stuck in the middle. But for $1 million and with $849 million still in Birch’s pockets, why not let the guy give it a try?
There is another Facebook clone called VKontakte: The social network from Russia with love. Now VK seems to be able to keep Napoleon (Zuckerberg) away.
The Remarkable Move of Vevo and its Owners
Billboard magazine announced that YouTube has acquired a 7% stake in Vevo and is paying around $50 million for that chunk.
Vevo was launched in 2009 by record labels Sony Music and Universal. The labels invested over $200 million in music videos, content and programs.
Vevo can be fully personalized by its users and it has social media inside. Due to the Facebook integration Vevo users can also co-create and share playlists with friends. Vevo services are free of use on the web and mobile web, and soon available for Xbox.
It seems to be one big mash-up on the social web, right now?
Lot of old skool firms like News Corp thought they were smart by acquiring social networks like MySpace. How wrong could they have been?
The acquisition and sales of MySpace was very bad for the company funds and reputation. But for Murdoch goes: I got 99 problems but a bitch ain’t one (Jay-Z).
Same goes for AOL. They bought Tech Crunch, Go Viral and Bebo for $850 million, selling it back for $1 million.
And Walt Disney, News Corp and Comcast are trying to sell Hulu for already 2 years.
If you compile and analyze this trend, I will have to draw the following conclusions:
Many old skool big corporations, broadcasters and publishers are clearly not non-linear minds. They lack knowledge and certainly strategic digital leaders.
Like the record labels, they should have all jumped 5 years earlier and because they didn’t, they are acquiring the wrong companies.
Or the big boys are buying the right companies, but for the wrong reasons.
Mostly it’s the acquiring DNA that’s in the way.
What About You?
How do you feel about Bebo or AOL? Will this trend continue? I would love to hear your ideas in the comments.
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About the Author
Igor Beuker was CMO at 3 listed companies, chairman at the IAB, jury member at Webby, AMMA and Esprix awards, founder of 3 digital agencies (sold to WPP) and global chief social officer at Mindshare. Now he is freejack consultant and still a sought after keynote speaker