Internet company AOL has finally managed to sell Bebo, the social networking site it bought two years ago for $850m (then £417m).
Criterion Capital Partners, a private investment firm, announced that it had bought the business, but did not disclosure the amount paid.
However, analysts suspect it to be just a fraction of the price paid by AOL in 2008. Just two years after buying the San Francisco-based company for $850m, AOL may be offloading it for just $10m, slightly over one per cent of its investment. Criterion is a US private investment firm specialising in turning around companies with revenues of between $3m and $30m.
Since then, Bebo has struggled to compete effectively against social networking rivals such as Facebook.
In April of this year, AOL announced plans to sell or shut down Bebo because it was unable to provide the “significant investment” needed to prevent its decline as a business.
The BBC’s technology correspondent Rory Cellan-Jones called AOL’s decision to buy Bebo “one of the worst deals ever made in the dotcom era”.
“The extraordinary thing is the deal was made years after the dotcom crash which was supposed to have taught the industry lessons,” he said.
“The interesting thing is that the founder, Michael Birch, walked away with $300m – it’s the art of timing.”
The news follows other AOL fire sales, such as the exit of digital advertising company Buy.at, which reportedly went for $17m after the company had paid $125m for it in 2008.
