According to the report, the price that Criterion Capital Partners LLC paid is a small fraction of the US$850 million AOL paid for Bebo two years ago.
“The young, highly active user base, revenue history, presence in countries throughout the world and solid technical infrastructure make it an attractive media platform both as a standalone entity and in the context of our broader investment objectives,” said Criterion Managing Partner Adam Levin to The Wall Street Journal.
The remaining AOL stock has been dismissed by the company as “worthless”, but it expects a tax benefit of US$275 million to $325 million for its failed investment.
Bebo failed to gain a foothold in the US market with just five million US visitors last month, compared to 130 million Facebook visits, according to online traffic tracker comScore.
The deal had already been in the pipelines for some time, with AOL saying in April whether they would sell or shut the site down.
Jon Brod, executive vice president of AOL Ventures is reported to have written to employees last April, “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,” he wrote.
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