AOL - You shoulda hired us....

Thats AOL over Barrel plus......

Mike Butcher writes on TechCrunch:

I didn’t quite believe it when one of my most trusted sources told me that AOL was seriously considering selling Bebo, the social network it acquired for $850 million only a year ago. But I have now confirmed the rumor with three other sources intimately acquainted with the company. AOL is indeed quietly pondering a sale after watching Bebo perform much worse than it had hoped.

We'd heard vague whisperings too, but assumed it was standard post Crunch murmurings - but its interesting its broken surface. Mike asks:

That, combined with an advertising market buffeted by the waves of the economic downturn, means Bebo’s days at AOL could be numbered. Selling Bebo after only a year would be an astounding about-face. How did this happen?

How did this happen? That bit is easy - its because AOL/Time Warner have form as dumb money and got caught up in the whole SocialNet hype, and the Bebo management were sharp operators who pumped it up and flogged it off before the wheels came off. We wrote this about that at the time.

Anyway, read Mike's analysis of how Bebo played a blinder of a hand - and AOL had a clueless manifesto!.

And they overpaid - $850m for 20m people in Cash. Cash! Upfront!. No earnouts, no success based balloon payments, none of that standard M&A stuff that probably had even AOL's old lags throwing their hands up in horror.

I wrote the graphic above the day it was announced, hate to say it, but...... lets just say this one was an easy prediction. Makes you wonder about the people at AOL though

Would I sell now though - well, only if I wanted to compound the error of overpaying at the top of the market by selling at the bottom. If those guys hired us now, we'd say no, $200m (the reported price asked - doubt they'll get it) is not worth it - try to find a way of making a cut down service at least wash its face first.

Still, eBay is reported to be thinking of doing the same with Skype, so they're in good company. Must be something in the air - I wonder if Google will announce they're selling YouTube too?