AOL Drops Bebo to Focus on Patch (?)

Posted by Beverly Crandon on 4/06/10 • Categorized as Online Classifieds, Online Journalism, Social Media

There has been talk that AOL is planning on dropping Bebo, their social networking site, claiming that in the competitive world of social media, they’ve found it difficult to create a competitive and financially viable product out of Bebo.  I speculate on how much of that is really true and if their decision has anything to do with their recent and well embraced Patch.org initiative (a hyper-local online news, events, directory and classifieds site where content is contributed by the community) and their wanting to apply more energies there.  Already, Patch has progressed into an interesting business, but we’re still not convinced that it has a strong enough ’sustainability’ quality.

Whether the decision to drop Bebo is a strategic one or the right one, it seems difficult to understand the motivations, given the numbers posted about the social site.

Does the strategy change to be a geographic one, gender or age related…

If the focus for AOL truly lies in the future of Patch.org, there could be worries impending for newspaper publishers. For quite some time it’s been that suburban newspapers were maintaining some of their market share, as they were able to give advertisers a voice in a hyper-local forum found nowhere else, both online and in print.  If serious thought is put behind Patch.org and partnerships are formed to bolster key content areas of the site, things could get even more challenging for publishers.  One such natural partnership would be a play with Craigslist.  If you think about it, both properties apply a ‘for the people’ mentality and both have what the other doesn’t and both have dropped hints to wanting content sets that the other excels at.

Related information:

• Google once owned 5% of AOL and sold it at a loss to Time Warner in 2009
• Time Warner broke off the AOL extension of their business in 2009, after repeat and reported revenue losses
• AOL spent $850 million to buy Bebo in 2008