Bebo founder Michael Birch buys back failing $850m social network for $1m

 

It could be the bargain of the century or a triumph of hope over experience. The British founder of Bebo, the social network which briefly soared in the noughties, has bought back the company he originally sold for $850 million for just $1 million.

Launched in 2005 by Michael Birch, with his wife Xochi, Bebo swiftly became the number one online hang-out for UK teenagers to chat and share pictures.

But the craze faded and by the time Birch sold Bebo to AOL in 2008, tech analysts warned that the $850 million price was far too steep for a second-tier social network, whose 40 million users began to dwindle as Facebook stole its thunder.

With Twitter, YouTube, Tumblr and Google+ on the rise, Bebo joined MySpace in the social networking “graveyard” of the seriously uncool.

AOL threatened to close the site in 2010 and eventually offloaded it to Criterion Capital Partners for $10 million. Wrangles with investors led Bebo to file for bankruptcy protection in May.

A fortnight after MySpace demonstrated signs of life, after being given a $20 million relaunch backed by Justin Timberlake, Birch, 43, believes his creation can be resurrected.

Yesterday he announced that Monkey Inferno, his San Francisco-based investment company has bought Bebo’s assets from the receivers for $1 million in an auction.

“Can we actually re-invent it? Who knows, but it will be fun trying,” tweeted the former computer programmer from Cheshunt, Hertfordshire.

Monkey Inferno, which has 21 employees, is advertising for new engineers and developers to help reinvent the platform. Optimists compared the Birch deal to Steve Jobs’s return to Apple in 1997, 12 years after resigning as chairman, which heralded a creative and commercial resurgence at the computer giant.

Birch has yet to lay out his vision but he has unfinished business, according to an associate. “He has wanted Bebo back for some time,” said the colleague. “Michael was a co-owner with the consortium who owned it after AOL but he questioned their competence.”

“It’s a good deal for $1 million,” the associate said. “Bebo has assets including a large email database. They will be looking to upgrade it for today’s world of video-enabled smartphones.”

Shaan Puri, CEO of Monkey Inferno, said: “Bebo has always been about connecting people and was fun. At its peak it had more on time site per user than Facebook. We want it to continue to be that: a place to help people to connect and that will be fun to use.”

Puri added: “We know the odds are stacked against us, but we love challenges and the Bebo users deserve better than what they have received the past few years.”

The Birchs, who met when they were students at Imperial College, London, initially set up Bebo - which stood for “Blog Early, Blog Often” - as an online address book.

Mr Birch admitted: “If it had been executed perfectly it could have taken on Facebook - but we were always in catch-up mode.” He sold Bebo at the “perfect time – it maximised the value.”

The couple are currently developing a private members club in San Francisco, where they now live with their three children.

Social network graveyards:

MySpace

Music-centred social network, launched in 2003, attracted 100 million users at its peak but was overtaken by Facebook in 2008, which appealed to older users. $580 million News Corp takeover went sour as MySpace “friends” fled. Relaunched this week, backed by Justin Timberlake

Faceparty

UK-based site inviting people to join “the biggest party on earth” became UK’s most visited page in 2006 and enjoyed 6 million members. Fell foul of child protection concerns and terminated accounts of users over age of 36 in attempt to keep its youthful cache.

Friendster

Californian site turned down $30m Google takeover and briefly became leading social network in 2004. By 2009 mocked by The Onion News Network as an archaeological relic, untouched since 2005. Relaunched as social gaming network in Malaysia in 2011 and claims 115 million users.

Friends Reunited

Created in 2000 by Steve and Julie Pankhurst of Barnet, Hertfordshire to help people reconnect with school and college friends, Friends Reunited became a phenomenon, signing up 15 million members. Bought by ITV for £120 million in 2005, visitor traffic dropped as site failed to innovate. Valued at £5.2 million by current owners DC Thomson.

Suggested Topics
Sport
Luis Suarez and Lionel Messi during Barcelona training in August
footballPete Jenson co-ghost wrote Suarez’s autobiography and reveals how desperate he's been to return
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
Voices
Hunted: A stag lies dead on Jura, where David Cameron holidays and has himself stalked deer
voicesThe Scotland I know is becoming a playground for the rich
News
people
PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Arts and Entertainment
Architect Frank Gehry is regarded by many as the most important architect of the modern era
arts + entsGehry has declared that 98 per cent of modern architecture is "s**t"
Arts and Entertainment
Soul singer Sam Smith cleared up at the Mobo awards this week
newsSam Smith’s Mobo triumph is just the latest example of a trend
News
Laurence Easeman and Russell Brand
people
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
film
Sport
football
News
news
News
people

Britain First criticised for using actress's memory to draw attention to their 'hate-filled home page'

Arts and Entertainment
A photograph taken by David Redferm of Sonny Rollins
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Business Analyst - Surrey - Permanent - Up to £50k DOE

    £40000 - £50000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    ***ASP.NET Developer - Cheshire - £35k - Permanent***

    £30000 - £35000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    ***Solutions Architect*** - Brighton - £40k - Permanent

    £35000 - £40000 Per Annum Excellent benefits: Clearwater People Solutions Ltd:...

    Senior Software Engineer - C#, VB.Net, ASP.Net - Kingston, Sur

    £50000 - £60000 per annum: Ashdown Group: Senior Software Engineer - C#, VB.N...

    Day In a Page

    Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

    Wilko Johnson, now the bad news

    Former Dr Feelgood splits with manager after police investigate assault claims
    Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

    Mark Udall: The Democrat Senator with a fight on his hands

    The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
    New discoveries show more contact between far-flung prehistoric humans than had been thought

    New discoveries show more contact between far-flung prehistoric humans than had been thought

    Evidence found of contact between Easter Islanders and South America
    Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

    Cerys Matthews on Dylan Thomas

    The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
    DIY is not fun and we've finally realised this as a nation

    Homebase closures: 'DIY is not fun'

    Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
    The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

    Air New Zealand's wizard in-flight video

    The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
    Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

    Pumpkin spice is the flavour of the month

    The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
    11 best sonic skincare brushes

    11 best sonic skincare brushes

    Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
    Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

    Paul Scholes column

    I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    While other sports are stalked by corruption, we are an easy target for the critics
    Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

    Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

    Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

    A crime that reveals London's dark heart

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
    Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

    Lost in translation: Western monikers

    Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
    Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

    Handy hacks that make life easier

    New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
    KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

    KidZania: It's a small world

    The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker