Bebo.com goes down

Bebo.com goes down, and here is what went wrong according to The Guardian

The announcement that AOL is likely to close or sell off the social networking site Bebo comes as no surprise to industry watchers, marking the latest in a string of acquisitions that seem to have become the kiss of death for web startups.

Two years after an $850m (£748m) cash deal that surprised even the most optimistic pundits, AOL has said it can no longer fund the social media service and yesterday told employees it would sell the site or close it completely this year.

Bebo's popularity peaked in 2008, at about the time of the sale, but steadily declined as Facebook aggressively expanded its international user base, particularly in the UK.

According to figures from ComScore, Bebo's global unique visitors in February totalled 12.8 million, which was down 45% on February 2009. Facebook had 462 million visitors, MySpace nearly 110 million, and Twitter 69.5 million.

One source close to the company said Bebo had suffered from AOL's strategic changes and a lack of funding that made it impossible for the site to compete with Facebook, which now dominates the social networking market.

The source described Bebo's demise as the inevitable outcome when digital media startups are bought by more established companies. "You set out with a certain strategy and aim for a certain user experience, and they change it," the source said. "They get rid of staff and cut costs, and it still doesn't work. Years go by and the business declines. And it's not unique to Bebo – look at Friends Reunited, Skype, MySpace ..."

Another source described the lack of funding by AOL as critical to Bebo's struggle since it was bought. "Bebo needed investment and engineers. At one point, we had 40 engineers when Facebook had something like 2,000. You can't produce a good product fast enough at that scale. In fact you can't even keep the site running properly."