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Aol Spending 850 Million For Bebo

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by Kevin Maney
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Mar 13 2008 12:00am EDT

AOL Spending $850 million for -- Bebo?

Raise your hand if you're on the Bebo social networking site? Or even ever HEARD of the Bebo social networking site. No? Yeah, that can be expected unless you live in Ireland or New Zealand, where it actually is popular.

So, then, why is AOL buying it for $850 million? Has inflation gotten that bad? This is not the result of a bidding war. It seems that Yahoo, News Corp., Google, CBS and perhaps a host of others looked at Bebo and passed. So essentially at this point Bebo is like a marked-down Calvin Klein shirt at TJ Maxx. And still, AOL paid $850 million. Kara Swisher dissects the numbers and doesn't seem too impressed. Om Malik thinks Time Warner's synergy rationale is a bunch of crud -- and, really, by now we should know that anytime Time Warner talks about synergy it's a bunch of crud.

And all this is happening as AOL seems to be sinking, Time Warner doesn't know what to do with it, and AOL is looking at a market that will probably be dominated by the a duopoly of Google and Micro-hoo. What better time to spend $850 million on an iffy asset?

bebo.jpg. □

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