Yahoo's Rumored $1 billion Talks With Bebo

Update: Recent Comscore traffic data for Bebo, MySpace and Facebook is here.

Rumors about social networking site Bebo being for sale come up every few months. First it was British Telecom for $550 million in July 2006 (we started that one), then the Financial Times reported they were in talks with Viacom a month later.

Now, The UK’s Telegraph is reporting that Yahoo is looking, and may pay as much as $1 billion. Just one problem, though. The Telegraph isn’t exactly known for breaking tech M&A stories, and the rumor has an exceptionally weak source – “according to silicon valley gossip” the article says. That sounds like something the Telegraph’s correspondent overheard after ten or twelve cocktails last night at a party. And while I don’t doubt that Yahoo is sniffing around Bebo, $1 billion seems a tad high for the service.

Yahoo would have bid as high as $1.6 billion for Facebook last year according to leaked documents. But Bebo, while large and growing, is far smaller than Facebook. And it’s also smaller than Hi5, Orkut, Friendster and Tagged, according to Comscore.

On the plus side, Bebo does claim 25 million users, about a quarter of what MySpace has today. And they are very strong in the UK. Sometime last year I stopped becoming incredulous as the size of some of these acquisitions – If it takes $65 million to buy a Grouper, then maybe Bebo really is worth $1 billion.

I have emails in to Bebo and Yahoo for comment.