AOL, in an attempt to redefine itself might just pull the plug on $850mn acquisition, Bebo.

"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’s EVP [source: Marketwatch]

Bebo has witnessed a consistent decline in the traffic and as per comScore, the traffic was down 45% since last year. AOL will either sell out or shut down Bebo, social networking site it acquired in March of 2008.

bebo site traffic

On a similar social networking note, Facebook today announced shutting down the Facebook Lite experience [users will be navigated to Facebook.com].

If you look at the above two announcements, it comes out clearly that companies need to experiment and fail fast. Facebook has been a great example of this, while others (includes Orkut which is losing out to Facebook in India) are too late to react to the market, too late to understand the pulse of the users.

Is Google too approaching the same path? Most of its social networking initiatives have failed and the search engine is facing stiff competition from Facebook and Twitter (for instance, Facebook is driving more traffic to Yahoo than Google). Nothing changes in the short run, but this is how companies lose relevance eventually [Yahoo anyone?]

What’s your take?

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