AOL offloaded Bebo this week, less than to two years after buying it for $850m (£417m), a huge chunk of cash. It was bought by little known US investment company, Criterion  Capital Partners, for a paltry $10m, the monetary equivalent of a smack in the face. But the big question here is, what does the future hold for Bebo?  Can a relatively small company like Criterion bring the much-maligned social network back from the brink?

Back in the dark days of 2005 things looked pretty chirpy for the social media site. Back then it was second only to Facebook in the popularity stakes, it had more than 40m world-wide users, mostly teenagers and was more popular than MySpace.  Even with hopes and user numbers running high, AOL have struggled to make it work since they took over in 2008.

With their purchase, AOL aimed to marry both instant messaging applications AIM and ICQ, within a proper social network to let users communicate and extend their existing social relationships online.  To generate the cash they planned to add their Platform A advertising platform.

Over the years, there have been too many inflated takeovers, floated along by high initial uptake figures and fickle audiences.  Microsoft paid $240m for a 1.6% stake in Facebook in 2007, the company was valued at £7.5bn at the time. AOL bought Bebo in 2008, a good four years after the first social networks arrived and nearly three years after MySpace was bought by News Corp. for $580m in 2005.

Social Media Communities - Flickr Image

Bebo’s future plans are still unclear.  Adam Levin, Criterion Capital’s managing partner, stressed there was still “lots to be positive about”.  He has a point – Bebo does have high user numbers but these numbers are nothing like the “almost guaranteed” 1billion users that Facebook is approaching in 2010.

Bebo benefits from a young highly active user base, who have a strong presence online, they’re up on their technology and regularly consume video content online. Bebo went down the video channel route, rebranding themself as a media outlet first and a social network second.  As well providing unique streaming content, Bebo video was used to lure in the advertisers. Video soap-operas like KateModern allowed for product placement and online chats between characters and online users.

But that was then and this is now. California-based Criterion Capital Partners are now Bebo’s owners. The little-known company has hopes of breathing new life into the platform. If the partnership works, great. Personally I don’t hold out much hope. This is purely down to the fact that if AOL can’t manage it, with all their industry clout and free-flowing cash, who can.

There are plenty of failed social media sites that can act as warning to Criterion - Friends Reunited? Plaxo? LiveJournal?

Muddled marketing messages and repeated format changes at the hands of AOL, slowly turned users off and when it came to reconnecting with old friends online they were, more often than not, already on Facebook. It was an unfortunate situation that really didn’t help Bebo’s cause.

Bebo was deserted by its youthful users as soon as it became ‘uncool’ and, in the end, the demographic that was most receptive to it at the start was also the most fickle.

Image courtesy of BirgerKing.