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
PROMOTED VIDEO
Life and Style
ebookNow available in paperback
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Arts and Entertainment
Stik on the crane as he completed the mural
art
News
Happy in his hat: Pharrell Williams
people
News
i100(More than you think)
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
Arts and Entertainment
John Hurt will voice Prince Bolkonsky in Radio 4's War and Peace
radioRadio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
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

    h2 Recruit Ltd: Business Development Executive - Software

    £20000 - £25000 per annum + 55,000 OTE + benifits: h2 Recruit Ltd: Software Sa...

    Argyll Scott International: 2x Service Desk Analyst

    £20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

    Recruitment Genius: PHP Web Developer

    £20000 - £40000 per annum: Recruitment Genius: This leading provider of web an...

    Langley James : Project Manager, Healthcare, Devon (6 month Contract) £500 pd

    £425 - £525 per annum: Langley James : Project Manager, Healthcare, Devon - (6...

    Day In a Page

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
    Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

    Sol Campbell cries foul at Labour's mansion tax

    The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
    Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

    Sarkozy returns

    The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
    Is the criticism of Ed Miliband a coded form of anti-Semitism?

    Is the criticism of Miliband anti-Semitic?

    Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
    Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

    Ouija boards are the must-have festive gift

    Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
    There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

    In pictures: There's a Good Girl exhibition

    The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
    UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

    UK firm Biscuiteers is giving cookies a makeover

    It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
    Can SkySaga capture the Minecraft magic?

    Can SkySaga capture the Minecraft magic?

    It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
    The King's School is way ahead of the pack when it comes to using the latest classroom technology

    Staying connected: The King's School

    The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
    Christmas 2014: 23 best women's perfumes

    Festively fragrant: the best women's perfumes

    Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
    Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

    Arsenal vs Borussia Dortmund

    The Ox celebrates century with trademark display of speed and intuition
    Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

    When two worlds collide

    Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
    Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

    Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

    Our partner charities help veterans on the brink – and get them back on their feet
    Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

    Putin’s far-right ambition

    Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
    Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

    Escape to Moominland

    What was the inspiration for Finland's most famous family?