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Bebo sale highlights weakness of online advertising models

Bargain basement bebo

Bebo is passing into the hands of Criterion Capital Partners Fund, an investment vehicle with no web / social networking expertise or industry partners.

Wouldn’t they be better off tying up with an existing organisation that could add expertise and help them push the Bebo environment?

Criterion’s own website is dead.  The current page is just a 404.  Hardly the most promising partner to help Bebo develop the wider web presence it needs!

AOL is not quite losing the $840 million some headlines imply, as there will be a considerable tax advantage to them, but this still looks like terrible business.  They appear to have seen Bebo as an advertising cash cow, but have now woken up to the reality that social networkers, especially the young ones Bebo is aimed at, won’t go massively for on-line advertising and links.

If Bebo, which looked so promising not that long ago, can’t generate sufficient revenues, it seems advertisers are waking up too.  Social networking may continue to grow for a long time to come, but is clearly not the new silver bullet to target all audience groups.

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