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Social Networks That Have Failed Under New Owners

Bebo, Myspace, Facebook: What your website says about you
AOL’s struggle to make Bebo profitable is not the first time that a social network has brought trouble to its new owners.

Both the purchase of MySpace by News Corporation and of Friends Reunited by ITV has coincided with those networks losing huge amounts of value: Rupert Murdoch paid £364 million for MySpace, while ITV paid £175 million for Friends Reunited. MySpace is now valued for “next to nothing” according to former Merrill Lynch analyst Henry Blodget, and ITV sold Friends Reunited for £25 million last year.

One analyst who did not wish to be named said that major companies such as AOL and News Corporation often used acquisitions to fill gaps in their strategies, but then “forced new businesses to fit old business models – so AOL bought Bebo and then tore out all the successful parts to try to build a rival to Facebook”.

Facebook, Twitter and LinkedIn, while still successful, remain in the private hands of their owners. All three have been linked with takeover bids throughout their histories – the value of Facebook, however, appears to already be declining. When Microsoft took a stake in the company in 2007, it was valued at $15 billion; recent trades value the company at $11.5 billion. Few dotcom businesses have, however, retained value for as long as Facebook.

source : http://www.telegraph.co.uk/technology/social-media/7567153/Social-networks-that-have-failed-under-new-owners.html

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