Now that all of the major search engines have acquired interactive marketing specialists, the next wave of buyouts may come on the content side. Of course! Once your online advertising possibilities expand, it makes sense to broaden the Internet traffic you control.
So it probably wasn't much of a surprise to see England's Telegraph report over the weekend that Yahoo!
Bebo is no MySpace. News Corp.'s
The fast-growing site knows how to draw a crowd. Apparently, it's also drawn a fair share of suitors, if one is to believe Telegraph's rumor-mill claims that Bebo spurned offers from British Telecom
Oooh, Bebo I love your ways
So why is Yahoo! supposedly willing to pay twice as much for Bebo as News Corp. paid for market leader MySpace in 2005? To be fair, MySpace was a smaller phenom when Rupert Murdoch's company bought in two summers ago. Its parent company Intermix was generating just 27 million monthly visitors across its sites, with most of those users logging into MySpace. Bebo stacks up nicely, and social networking is no longer a fringe dot-com niche.
Social networking is also seen as an easier advertising sell these days. Big brands are no longer afraid of promoting products on youth magnet websites. If that's where the impressionable audiences are hanging out, that's where the ad impressions have to be.
Only a year after News Corp. paid $580 million for MySpace, Google
Sure, Bebo is young. The site was launched just a few months before MySpace got hitched. However, the site would fit well into the Yahoo! portfolio of acquired properties. Like Flickr, Bebo was founded by a charismatic husband-and-wife team. Like both Flickr and social bookmarking site Del.icio.us, Bebo's DNA is all about the Web 2.0 power of building passionate communities.
Bebo fits. Yahoo! has the money. It has to be encouraging to any potential Yahoo! acquisition to see the welcome autonomy that the search engine giant has granted many of its buyouts. So when does Bebo sign on the dotted line?
Hold your horses, compadre. A rumor is often little more than wishful thinking.
Making it happen
If Bebo has in fact turned down other offers, it has little reason to fall blindly into Yahoo!'s arms. Obviously, MySpace would be worth far more today as a stand-alone entity than it was when it handed over the keys two years ago.
However, you never know when a site's popularity has peaked. The dot-com graveyard is lined with upstarts that were too greedy for their own good. Social networking is a niche with a thin moat, and the landscape will only get more crowded in the future.
Bebo may be seen as a site with plenty of upside potential, but it's already pretty popular in places like England and Ireland. That's how it goes with social networking. Google's Orkut is typically seen as a social networking bust stateside, but it's huge in Brazil.
If Bebo balks or demands too much, Yahoo! can always see if Facebook is any humbler these days. That would be fine for Bebo if Bebo in 2007 is like MySpace in 2005, but what if it's more like Friendster in 2003?
These are intriguing times. After the recent wave of high-profile digital marketing acquisitions, I can definitely see Internet content as the next feast worth unhinging the jaws for.
I have recommended popular dot-com hubs like CNET Networks
In another article today, I argue that the digital marketing bandwagon is full. The next to leave town appear to be companies that command healthy amounts of Web-based real estate.
Pack your bags, Bebo. There's a deal to be had out there, somewhere.
The Knot and CNET are active recommendations for Rule Breakers subscribers. Yahoo! is a Motley Fool Stock Advisor selection. If you want in on either service, now is the time to check it out with a free 30-day trial subscription offer.
Longtime Fool contributor Rick Munarriz wonders why some social networking sites thrive only in certain geographical areas, but he's fairly sure it's all about the network effect. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.