Glancing at the many blog posts about AOL's unexpected acquisition of social network Bebo, there's no real consensus as to whether it's a smart idea. If anything, the collective mood of the Web's talking heads seems to be thus: if AOL can smoothly integrate Bebo with its AIM client and Platform-A ad network, great. Unfortunately, AOL doesn't have that kind of track record.
Perhaps the most optimistic of the bunch was CenterNetworks blogger Allen Stern, who said that this really can't be bad for AOL's advertising arm. "It brings their ad inventory for Platform-A skyrocketing upwards with a youth and young adult demographic," Stern said. "This is a good complement to their current AOL properties which tend to tick a bit further up the age chain."
But Stern also noted some potential snafus: "Yahoo currently serves ads on Bebo, so we will need to see what happens with this relationship."
Clint Boulton at eWeek also gave the deal a thumbs-up, saying that the acquisition will effectively "double" AOL's reach by adding its 40 million members to the 40 million already using instant-messaging clients AIM and ICQ. Plus, there's the technology. "Bebo's gem is Open Media," Boulton wrote in reference to the platform that allows big-media content producers to get their audio and video onto the social network. "Bebo could be what AOL needs to breathe life into its sluggish Platform-A ad platform, which has not paid the dividends the company officials expected since they launched it last year."
All Things D's Kara Swisher wasn't so upbeat, suggesting that AOL had purchased a company with "not a whole lot of revenue and negligible profits" and that perhaps the best part of the acquisition for AOL is Bebo president Joanna Shields: "AOL gets an experienced and savvy Web exec, which it desperately needs these days, given the flux there."
GigaOm's Om Malik called the acquisition "ballsy," considering it's putting so much stake into the uncharted territory of social-media advertising profits--everyone knows by now that MySpace's display ad deal with Google hasn't exactly been a gold mine. "It is even more brave considering how Platform-A has its own management problems...there are reports of AOL slashing half their sales force."
Malik also categorized AOL parent Time Warner's strategy as "schizophrenic," citing simultaneous business decisions that don't really seem to make sense. "Jeff Bewkes wants to get rid of AOL (and Time Warner Cable) and focus entirely on his old, Hollywood-style businesses. Earlier this week he was happy to talk about a deal with Yahoo and get rid of AOL, which is going through a major crisis," Malik wrote. "And at the same time they are spending $850 million in cash on Bebo. Maybe it helps AOL become a more sexy acquisition, or a spin off candidate?"
Henry Blodget of the Silicon Alley Insider agreed that AOL buying Bebo is a risky move, considering the fact that Bebo really isn't a household name in the U.S. "The potential home run here is if AOL can effectively combine AIM, ICQ, and Bebo and accelerate the growth of all three," Blodget wrote. Whether or not they can do that is totally unclear. What the deal does clarify, apparently, is Blodget's theory that Jeffrey Bewkes won't sell AOL any time soon. "We think he'd hit a good bid, if one came along, but one is unlikely to. Our source suggested that Bewkes planned to give AOL until mid-year to prove that its turnaround can work. This acquisition suggests that he is, in fact, committed to doing that."
TechCrunch's Michael Arrington highlighted the fact that Bebo will be closely woven into AOL's existing AIM client, one of the company's most successful products. "AOL is clearly putting a massive effort into transforming the company from a dial up broadband provider into a company that has the competitive fire," Arrington wrote without taking a clear stance on whether the acquisition was a dumb idea or not.
But he ended on an optimistic note: "The company has been releasing genuinely innovative new products and has also made a number of smaller strategic acquisitions over the last year or so. And there are lots more to come, apparently."
So what it all comes down to, really, is whether you have any faith left in AOL.
Read more of News.com's coverage: "What Bebo means to AOL"