The rumors are true: hedge fund Criterion Capital Partners is indeed the buyer of Bebo. As we reported yesterday, AOL is offloading the social networking service for less than $10 million (other media are reporting a purchase price of around $2.5 million).
To remind you: AOL paid $850 million for Bebo back in 2008. Ouch indeed.
In a press release that just went out, Criterion acknowledges that it has acquired the Bebo business from AOL and that it will “assume the rights and complete operating control over the global social platform business”.
The acquisition and financing was led by CCP partner Adam Levin in partnership with business strategist Paul Abramowitz and web entrepreneur Richard Hecker.
Criterion Capital Partners will take over Bebo’s global operations immediately and retain its San Francisco-based headquarters.
Exact terms of the deal are not being disclosed by either party, but AOL CEO Tim Armstrong sent a note to all employees this morning that suggests our earlier reports that the ability to offset almost the whole sum it paid for Bebo as a tax loss played a big role are correct.
A couple of paragraphs from said note (emphasis ours):
In April we communicated the fact that Bebo was among the assets we
would be not be keeping as part of our main portfolio of businesses.
At that time, we indicated that we hoped to finish our strategic
evaluation by the end of May, which we did. Today we are announcing
that we completed the sale of substantially all of the assets of Bebo,
Inc. to Criterion Capital Partners, LLC.This sale is important for Bebo’s users and for AOL. The deal will
allow Bebo’s users to remain within the social platform that they know
and love, while enabling a new owner to bring new possibilities and
experiences to bear. Criterion Capital Partners are specialists in
facilitating growth plans and turnarounds and are well placed to drive
Bebo’s effort to strengthen its foothold within the highly competitive
social networking arena.For AOL, the transaction will also create a meaningful tax deduction,
which should allow us to more effectively manage our tax strategy.
Launched in July 2005, Bebo has steadily risen to become one of the world’s most popular social networking sites. Users can create profiles on the site for free, stay connected with friends, watch videos, and listen to music. In early 2008 Bebo had over 34 million registered users and 7 billion monthly page views. Bebo’s founders have extensive experience in online social networking, having been involved in the founding and building of such companies as Birthday...
AOL is a global advertising-supported Web company, with display advertising network in the U.S., a substantial worldwide audience, and a suite of popular Web brands and products. The company’s strategy focuses on increasing the scale and sophistication of its advertising platform and growing the size and engagement of its global online audience through leading products and programming. On March 13, 2008, AOL Internet division announced their plans to buy social network Bebo for $850 million in cash. History of Aol: AOL was...
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