Bebo founder buys stake in the company he sold

By Maggie Shiels
Technology reporter, BBC News, Silicon Valley

Image caption,
Bebo's target audience are teenagers and young adults

The former owner of social networking site Bebo has re-invested in the ailing company which was sold off for a fraction of the price AOL paid for it.

Michael Birch originally sold Bebo to AOL for $850m (£540m) in 2008.

Its fading fortunes led AOL to dump Bebo for a reported $10m earlier in 2010.

Over the last couple of years Bebo has struggled to remain a force as Facebook has grown to become the world's biggest social network.

"Things have moved on since the sale and I have a lot of thoughts and ideas about how to make Bebo relevant again," Mr Birch told BBC News.

"It is exciting to be part of a company I founded and see what we can do to make Bebo a meaningful player in the world of social networking again."

As well as making an unnamed but "significant" investment, Mr Birch will also be an advisor to the company working on new products and being "quite hands on".

Bebo's new owners are venture funding firm Criterion Capital Partners.

The company's chief executive officer Adam Levin said after years of neglect by AOL, Mr Birch will be a valuable asset for the company.

"Michael was a pioneer in this space and his vision and understanding of the environment and landscape is crucial," said Mr Levin. "It was his baby at one point and he cares a lot about it."

"Under AOL, Bebo was neglected on the business side, the product side and users side," he said. "If it was a child, it would be in serious trouble."

Reversing fortunes

Bebo was founded by Mr Birch and his wife and business partner Xochi from their home in San Francisco in 2005.

It was seen as a significant player in the field, third behind Facebook and MySpace at the time.

Just as MySpace lost traction to Facebook, Bebo also fell out of favour. Even though it now claims 117m users the company finds itself being seen as an also ran compared to Facebook which has become the dominant player with more 500m accounts.

Mr Birch said he believed Bebo had something very different to offer.

"Facebook doesn't own the social networking space," he said. "They dominate the thing and they are good at what they do and have managed to become a very big business.

"They can't own everything and they can't be all things to all people and the opportunity is there for us," said Mr Birch. "We are trying to fulfil a different set of needs. The primary need is a slightly more lighthearted and fun experience than Facebook can provide."

In the last few weeks Bebo has introduced several new services including a video chat tool and a games section that uses virtual cash.

"We are still early on in the social networking evolution," said Mr Levin.

"While we have seen our user base erode over the last couple of years, we are working hard with new products to make the site a destination for people," he said. "We are beginning to see users who had deactivated their account coming back."

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