April 8, 2010 by Andre
The massive rise of Facebook has had huge implications for the internet as a whole, many of the biggest companies have made specific changes to their services to either accommodate or compete with the social networking giant, but this meteoric rise of Facebook is inevitably going to cause some casualties.
Two years after AOL purchased social networking site Bebo for close to $1billion (£550 million) they are planning on either shutting it down or selling it if they can find a suitable buyer.
AOL sent an e-mail to Bebo’s 40 remaining employees this week outlining the situation:
“As we evaluate our portfolio of brands against our strategy, it is clear that social networking is a space with heavy competition, and where scale defines success.
“Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space. AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking.”
As a result of this, the UK based company is now actively looking for potential buyers to prevent a shutdown. Many of the employees have already been let go as all 30 staff members at the UK office in central London have been made redundant after the offices were closed at the end of April.
This eventuality has been forecast for sometime as Bebo’s figures have taken a dramatic nose dive this year. As of February 2010 the number of visitors to the site has dropped from 40m a month worldwide to a meagre 12m.
Many have blamed AOL for Bebo’s unfortunate reversal in fortunes as it is claimed that they often did not listen to any user feedback or partake in any market research in order to keep up with Facebook and improve the service. Instead they poured all of their resources into improving their AIM instant messaging program.
Facebook will be pleased.
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