The days appear to be numbered for Bebo at AOL
In an internal memo first circulated by PaidContent.org, the struggling online giant reveals its hopes of unloading its fading social-networking site.
AOL may have paid $850 million for Bebo -- before AOL was spun off by Time Warner
It's easy to see why AOL wants out of Bebo. Outside of Facebook, social networking has been a tough gig. Even the mighty Google
Given the network effect of social sites, it's not a surprise to see just one site grow at the expense of others. Folks will gravitate to where the friends, family members, and colleagues are hanging out -- and abandon the rest.
It's a pity for the non-Facebook sites, because social networking appears to be fertile soil for paid search at the lucrative local level.
Is anyone other than Facebook really growing? Twitter's a speedster, but it's more of a microblogging site with limited interaction. Genealogy specialist Ancestry.com
Bebo's shrinking usage will make it difficult to land a buyer, just as AOL's fading access business makes it tricky to unload on United Online
This doesn't mean that Bebo is worthless. However, the stigma of buying a site in decline may thin out the bidding pool of publicly traded buyers. Private equity firms and venture capitalists may pick at its bones if the price is right, believing that they have the magical elixir to turn the social networking site around.
If they are history scholars, they may realize that the odds are against them. Has there ever been a social networking site that bounced back into prominence after peaking? Bobbing for Bebo won't be as fun as it sounds.
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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.