After a record $880 million buy out by AOL only 2 years ago, Bebo will close its doors after failing in the US. What’s Bebo you say? Exactly!

Bebo was, at its peak one of the largest online social networks, with figures of over 40 million users per month, but with AOL’s record breaking buy out, figures have dwindled to just 12 million as of February 2010.

A favourite amongst the ‘tween’ market (pre teens) Bebo did not have the capability to keep up with its main competition Facebook.

Where did it all go wrong?

Competition from Facebook and lack of investment by AOL dented the popularity of the once high-profile social media site.

According to Stephane Panier who is the global head of Bebo, AOL’s buy out had the biggest negative impact, Stephane stated

“The company was not that good at listening to user feedback, doing market research or beta testing. Too many resources were put into the AIM [AOL Instant Messenger] integration and not enough into keeping Bebo bug free and keeping its core features up to date.”

AOL first went after the hugely more popular site Facebook, but the smart boffins there told them quite frankly where to go! And on that faithful day, Bebo’s days were numbered!

Bebo V Facebook = Accrington Stanley V Man Utd

Bebo only had 12.8 million unique visitors in February; compare that to Facebook’s 426 million users. This shows you just how small Bebo looks when compared to the most popular social network site in the world.

So what has made Facebook more successful than Bebo?

Facebook has evolved with the internet and continually reinvents itself. It has incurred the wrath of people on numerous occasions, with people forming groups on Facebook to protest. This has picked up media attention from around the globe, and has been reported on in many different countries, and as we all know, there is no such thing as bad press!

Bebo on the other hand, seems to have less impact on the worlds media! With a wide audience having never even heard of it

Bebo’s popularity peaked in 2008, at about the time of the sale to AOL, but steadily declined as Facebook aggressively expanded its international user base, particularly in the UK.

One source close to the company said Bebo had suffered from AOL’s strategic changes and a lack of funding that made it impossible for the site to compete with Facebook, which now dominates the social networking market.
The source described Bebo’s demise as the inevitable outcome when digital media startups are bought by more established companies. “You set out with a certain strategy and aim for a certain user experience, and they change it,” the source said. “They get rid of staff and cut costs, and it still doesn’t work. Years go by and the business declines.

Another source described the lack of funding by AOL as critical to Bebo’s struggle since it was bought. “Bebo needed investment and engineers. At one point, we had 40 engineers when Facebook had something like 2,000. You can’t produce a good product fast enough at that scale. In fact you can’t even keep the site running properly.”
At its peak, Bebo was the most popular website for younger teens. The company, founded by UK developer Michael Birch and his partner Xochi in 2005, moved to San Francisco, where it grow virally with its biggest audiences in the UK and Ireland.

I bet the smart guys at Facebook and wiping their brows and thanking the internet lord for turning down the undoubtly handsome offer from AOL.