AOL has bought Bebo for *cash* $850 million. Given the fact that Yahoo!'s business deal cutters shifted their feet at a $1.65 valuation of YouTube and couldn't figure out a fair multi-billion dollar price for Facebook -- maybe *now* Yahoo! can get a major Social Network on a platter if it cuts a deal with AOL? Yahoo!'s business team is still living in the pre-SN era where they got Flickr for under $ 50 million. Those days are history.
Long complicated route for Yahoo! to finally get a valid step into Social Networking. Bebo is ranked 5th world-wide in Social Networking traffic. Its more popular in UK and has 40 m users world-wide -- which isn't bad. Yahoo! could work on winning in Europe (and maybe Asia) leveraging Bebo if it cuts a deal with troubled AOL.
Before Terry Semel left, and after Microsoft made its $31 per share hostile bid and then several times over, Yahoo! tried and failed again & again to get a stake in MySpace. Talks about a Yahoo! AOL deal have done the rounds lately -- two troubled companies hoping to console each other into a deeper mess. Bebo may be a bright spot of hope.
Here are TechCrunch's details on the failed Yahoo! efforts for Facebook. Why Yahoo! why?:
At Yahoo, the long running courtship has lasted at least as long as this year, and is internally referred to as “Project Fraternity.” Leaked documents in our possession state that an early offer was $37.5 million for 5% of the company (a $750 million valuation) back in Q1 2006. This was rejected by Facebook.
Things really heated up mid year. Yahoo proposed a $1 billion flat out acquisition price based on a model they created where they projected $608 million in Facebook revenue by 2009, growing to $969 million in 2010. By 2015 Yahoo projects that Facebook would generate nearly $1 billion in annual profit. The actual 2006 number appears to be around $50 million in revenue, or nearly $1 million per week.
These revenue projections are based on robust user growth. By 2010, Yahoo assumes Facebook would hit 48 million users, out of a total combined highschool and young adult population of 83 million.
Our sources say that Facebook flatly rejected the $1 billion offer, looking for far more. Yahoo was prepared to pay up to $1.62 billion, but negotiations broke off before the offer could be made.
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