John Paczkowski

Recent Posts by John Paczkowski

AOL to Acquire Last Chance at Relevance for $850 Million


Would something added to AOL, or AOL added to something else, make it stronger and more valuable? We can’t rule it out and we wouldn’t. It’s our obligation to make sure AOL gets into whatever configuration that makes it the strongest and most valuable.”

Time Warner CEO Jeff Bewkes

Google (GOOG) won’t be acquiring Bebo any time soon. Unless it’s willing to buy Time Warner’s (TWX) AOL first. This morning AOL announced plans to acquire the social-networking site. Price tag: $850 million–cash.

It’s a sizable and unexpected deal for AOL (talk about unlikely buyers …), which has itself been rumored to be an acquisition target. Bebo, which claims a global membership of about 40 million users, will expand AOL’s world-wide reach to some 80 million unique users–many of them in the 13-to-24 demographic. And if AOL is lucky, it will jump-start its sluggish advertising business.

“This is a tremendous acquisition and one I think is game-changing for AOL–it puts us squarely as a leader in social media,” AOL chairman and CEO Randy Falco said during a press conference this morning. “Bebo will be the cornerstone of our strategy to transform the online experience for advertisers, media companies and consumers. Bebo is the best social media asset out there. It’s a true pioneer in the space, has the most engaged audience on the Web and has seen tremendous growth since its founding less than three years ago. When you combine Bebo’s worldwide users with those who use AIM and ICQ, we reach around 80 million. … We will be a social media powerhouse.”

What does this mean for the Microsoft (MSFT)/Yahoo (YHOO)/AOL love triangle?