Rumor: Is Google About to Buy Bebo For $1 Billion To $1.5 Billion? Or Will it Be MySpace?
Erick Schonfeld
50 comments »
An unconfirmed rumor has surfaced that either Google or MySpace is about to announce a big $1 billion to $1.5 billion acquisition in the social space. After checking around with multiple industry sources, we’ve concluded that if the rumor is true the most likely candidate is Bebo, which we are told is raising capital and simultaneously shopping itself around again. We put the chances of this rumor being true at a solid 50 percent. Update: Make that a solid 51 percent.
To be clear, there is a long history of rumors surrounding Bebo as an acquisition target that turned out to be false or never panned out. The last one was in May 2007, when Yahoo supposedly wanted to buy it for $1 billion. At a TechCrunch party last summer (before I was working here), Bebo CEO Michael Birch told me that the Yahoo bid was a complete fabrication and the first he heard of it was from his Dad, who called him up after reading about it. When I contacted Birch last night about this latest rumor, he had no comment.
Let’s just go through the logic for each potential buyer, who might be bidding against each other. An acquisition of this size by Google in the face of Microsoft’s bid for Yahoo would show how swift Google can act while its competitors dither. It would also show that what it is really scared of is not a combined Microsoft-Yahoo, but the growing threat from fresh-faced upstart Facebook.
Google already owns Orkut, one of the biggest social networks globally, especially in Latin America. It just has not caught on in the U.S. Bebo is also a global play, but its strength is in English-speaking countries such as the UK, Ireland, Australia, and New Zealand. According to comScore, Bebo had 21 million unique visitors worldwide in December, 2007, with about 4 million in the U.S. Orkut had 25 million worldwide unique visitors. So Google would nearly double its social networking market share, as measured by active members. And it would have a strong English-speaking social network with which to begin to challenge Facebook here in the U.S.
Bebo is already part of Google’s OpenSocial platform, even though it embraced Facebook’s competing platform also. You can bet that Bebo’s Facebook effort would get a bullet in the head pretty quickly if it became part of Google. Still, given Google’s recent earnings shortcomings, which were partly attributed to an inability to make its ads on MySpace pay off, investors might not be so keen to see the search engine double-down on social networking. It is a distraction it can do without.
So what then of MySpace/News Corp.? What does it need Bebo for? It’s 107 million worldwide unique visitors overshadows every other social network out there. But Bebo could help MySpace with its global expansion, particularly in markets like the UK, Ireland, Australia, and New Zealand, where it is weak. Securing the No. 1 spot in each international market is the key to dominating them.
There is also a technology play here for MySpace. Both MySpace and Bebo are adopting OpenSocial as a way to let outside developers create apps for their social networks, so there would be interoperability on that front. But more importantly, Bebo has done a good job of adding the latest features to its site while still keeping it clean of clutter. MySpace could use some of that DNA, and beef up its engineering ranks with a serious Silicon Valley presence. One billion dollars to future-proof its site does not seem like too much to pay.
What void would Bebo fill on MySpace that is currently lacking?
chances of a rumor being 50% is kinda a stupid comparison:
50% Yes
50% No
There is a rumor that Google will be acquired by Yahoo, I place the chances of the rumor at 50% too
None of them will buy Bebo, IMHO.
Think about it, both myspace and bebo are social networks, after the purchase of myspace for over 500M, newscorp will not spend more than, they will instead use that money to expand myspace in the world.
Google already has orkut, and from comscore graph you can see that orkut is doing better.
Even though I’m skeptical about any type of acquisition from these two players, I think that Google may have an ad deal on bebo to expand their ad network and take a better advantage over yahoo.
But let’s see!
http://www.givemebeats.com
I assume this is a joke.
If not, what a great way for Google to ruin it’s public image even more.
1. Hey, social networks are to blame for our drag in Q407 earnings
2. Hey, Microsoft is buying out our biggest competitor in online advertising and paid search
3. HEY, I’VE GOT A GREAT IDEA: BUY A WEAKLING SOCIAL NETWORK AT A PREMIUM!!!!!
FAIL.
Like George Stuffonuphis said to Ron Paul…That’s not gonna happen.
If this happens it’s time for Silicon Valley to drop all the frenemy BS. How many companies can Google purchase before MySpace gets some pride and tells them to **ck off? When Google bought YouTube it killed MySpace as a player in the video category.
what ever happened to the rumor about Glam.com announcing a $1 Billion Ad deal?
Whatever happened to the rumor about Glam.com announcing funding?
PErhaps the Bebo rumor here came from the same whatever source
Erick,
It is clear you’re a smart guy…. so i’ll assume that you’re stirring up the pot by “implying” that Google is afraid of Facebook, right? Google is approaching $17 BILLION in revenue, whereas Facebook has a reported $150 million (assuming you support Kara Swisher’s report). Google has outstanding technology in algorithmic search, contextual advertising, and publisher distribution. Facebook, on the other hand, is simply the most overhyped bulletin board in the history of the internet with no defensible technology. Google also has MySpace as an advertising albatross which provides the perfect business case of problems inherit in social networks. This said, you don’t possibly believe any single person in any senior role at Google is truly concerned with Facebook, right?
Umm, are you sure Google isn’t looking to acquire the hot young Indian actress called Bebo?
http://www.youtube.com/watch?v=WirM3Zocu44
Now that’s a billion dollar booty.
@2
but it said it was a SOLID 50%.
The only thing Google needs to fear is sentiment on Wall Street. Everything else is within their control.
@ Andrew…I totally agree. What does 50% represent?…take a stance Erick..believe in your sources or don’t.
50/50 is like flipping a coin…call it Arrington. Heads or Tails?
“What’s the most you’ve ever lost on a coin toss?”
(Love that movie)
rumors? dude, are you in the reporting game or the rumor monger game. sorry but this is just lame.
Dont do it google. done
I didn’t think Shaq would go to the Suns either, so maybe this is the week for absolutely stupid pointless moves.
1 Billion sounds cheap for Bebo. What about hi5.com? Could that be the target? It’s huge international and would tie in well with Orkut.
“We put the chances of this rumor being true at a solid 50 percent.”
Yeah…half and half is pretty solid!
What about Twitter, I would not be suprised it was them…
hey, i just found this:
- Online Video Yellow Pages Site Pays Video Maker For Local Reviews
http://www.emediawire.com/rele.....651201.htm
Don’t do it Bebo! Say no, wait a year, and you too can be worth $15 billion.
That’s an interesting call!
google would be stupid to buy bebo…
they got enough problems.. and don’t need the distraction of propping up a second rate social network with crappy click throughs…
something they should have learned with myspace…
actually makes a lot of sense. surprised it hasn’t happened already in fact.
Google needs a social network (one that’s got traction in the US and/or english-speaking market), Facebook isn’t for sale & probably neither is MySpace. Bebo or Hi5 is arguably #3 after those two big guys.
and contrary to your opinion, i don’t think Google would put a bullet in Bebo’s FB-compatible platform. in fact, Bebo is very attractive to Google because they have that compatibility, as well as OpenSocial compatability.
now that you mention it, i’d have to give this one a high probability of happening, unless Michael & Xochi decide they aren’t for sale. don’t know if the number is $1B+, but then again that wouldn’t be surprising given the other transactions in the space recently.
that would make the whole horse-race on this picture even more interesting:
http://www.flickr.com/photos/500hats/2105757707/
btw,
facebook growth looks like it stalled and is line with myspace according to alexa….
just a bunch of people opening up accounts on facebook and not doing anything.. that’s not traffic.
you missed out something…orkut is the biggest social netwoking site in India (which is one of the largest emerging market)…it seems like orkut had luck only in India and Brazil..
yeah… google needs an established space that might be able to gain U.S. traffic where orkut could not… they have their social graph, their open social, … google has so many social initiatives but they have no real social network to speak of (in the U.S.) … ? seems strange… this could be a good move for google. is bebo worth that much though?
Next target : Twitter?
I think a lot of you are missing the point here. Whether it’s rumor or news… this is a BLOG, not the AP.
Erick knows the Bebo guy, got a reaction from him once about a rumor and now got an opposite reaction from him about a parallel rumor. He’s writing an interesting article about his gut reaction on a rumor.
It’s a BLOG, people. If you want news, stick to a news site. If Bebo is acquired by Google, you can be sure CNN will have a byline about it after the paperwork is filed. Sounds like fun.
Widgets man…….who’da thunk?
@28 right on the f___ing money. Thanks.
“a solid 50%”????…. WTF?
a.
“You can bet that Bebo’s Facebook effort would get a bullet in the head pretty quickly if it became part of Google”
I totally disagree with you on that - google has the money and vision to keep channels open for clowdy days. I don’t see google cuts all connections between bebo and facebook .
b.
I can understand why MySpace would like to buy bebo - gives them better starting point in the future battle of social networks , which will start eventually when the Google open social will have critical mass.
c.
Regarding google we must remember 2 things:
1. getting more pageviews results in more text ads which results in more money in the bank - once google finds a good way to syndicate it’s adsense into the social networks environment.
2.
Google’s open social prepares the ground for google to launch some sort of googlish social network - making google not just the entry point to the web.
Well..Solid 50% would mean..
1. Solid Yes
2. Solid No
what is a “bebo”
Bebo is way different from Orkut, if you can’t see that then don’t comment on this rumnour.
Bebo is a pure UK socnet. Users are 13-25. Its not a small site, but 1 billion is way off the mark)))))
Note to self: All TechCrunch headlines that end with a question mark can be followed with the word “No.”
Bebo is looking for financing at a $1bn+ valuation with Google and News Corp as potential investors. It is not up for sale.
Bebo worth $1.5 billion - obviously not. I know it’s inaccurate, but alexa doesn’t even put bebo in it’s top 100 sites.
If Google pays 1bn for Bebo, they’re dumber than MS. Heck, half of accounts on Bebo are fake. What is Google trying to achieve by buying Bebo. They can spend quarter of that to organically grow Gmail+Google Profiles.
I can understand why MySpace would like to buy bebo - gives them better starting point in the future battle of social networks , which will start eventually when the Google open social will have critical mass.
I’m really starting to thinking TC has jumped the shark. 50% chance? Worse than a weatherman. Can I have the 5 mins of my life back I just wasted on reading your post?
Acquiring Bebo would give MySpace the technology to work simultaneously on the Facebook & OpenSocial Application Platforms. That might jump-start efforts to support both.
Are you sure it’s Bebo and not Hi5 or imeem?
Google would likely do well with something like imeem or Bebo for a higher-value US presence (imeem). I echo Erick’s description of the value of bebo
MySpace would do well with something like Hi5 as Hi5 beats Orkut in most Latam countries.
A stupid rumor that will die with this article…
It is what it is: a rumor.
The point of saying there is a 50 percent chance of this being true is to try to communicate our confidence in the rumor. That is, we are not as confident as we normally are about these things, but feel it is more likely than not to be true. For that reason, we’ve updated the chance of the rumor being true to 51 percent.
But don’t get stuck on the number.
It’s probably definitely gonna be Bebo! I’m a very active user and all of the sudden these Google advertisements pop up on our pages from no where so I’m assuming they are setting things up! I really hope this doesn’t happen!!!!!!
hahahaha bebo roxz Soxx So Yeah if google buys it dan it will be public at skull we wudnt need tah go through proxy sites….:):)
Google through its Orkut, and Myspace both have strong market share in social networking space. They do not have any urget need to acquire one more player in the same field.
News Corporation, owner of Myspace, already told that they were not in the race for any soecial media company either it is Yahoo! or Bebo.
It is not a luxury thing: as the article mentioned Google would show up its potential by acquiring Bebo, while its campetetor Microsoft is acquiring Yahoo!. It is a business, they need look for the synergies that they are getting through the deal. Instead of Bebo, Google can put the money ($1 billion - $1.5 billion) for one more technology revolution.
So I sum up as,
If Bebo is the takeover target, acquirer would be some other company not the above both.