AOL offloads Bebo in $10m cut-price deal with Criterion
Published 18/06/2010 | 05:00
BEBO, the social networking website that was bought for nearly $1bn (€807.5m) two years ago, has been sold for less than $10m.
AOL, the internet giant, sold Bebo to private equity group Criterion Capital Partners for less than 2pc of the $850m it paid for the site in March 2008.
Although details of the sale were not released, it is thought the price was less than $10m. AOL said it expects to record a tax benefit this quarter of $275m to $325m from the sale.
New York-based AOL said on April 6 that it was weighing up a sale or shutdown of Bebo.
The company said it wasn't in a position to fund a turnaround of the website after losing ground to bigger social-networking rivals Facebook and MySpace. The price AOL paid for Bebo in 2008 included $766m of goodwill, according to regulatory filings.
AOL will treat the common stock of Bebo as "worthless" for tax purposes.
Bebo's worldwide unique visitors plunged more than 50pc to 12.6 million in April from a year ago, according to analysts.
"Criterion Capital Partners are specialists in facilitating growth plans and turnarounds," AOL chief executive Tim Armstrong said yesterday in a memo to employees. "For AOL, the transaction will also create a meaningful tax deduction."