2 Comments

Summary:

Questions about AOL’s (NYSE: TWX) purchase of Bebo continue to persist and Time Warner CEO Jeff Bewkes acknowledged that the company “may ha…

Questions about AOL’s (NYSE: TWX) purchase of Bebo continue to persist and Time Warner CEO Jeff Bewkes acknowledged that the company “may have overpaid” when shelling out $850 million for the UK-heavy social networking site, though if they did, it wasn’t by too much — he made a similar comment at D. Still, during a Q&A at the Bernstein Strategic Decisions Conference, Bewkes defended the purchase, and optimistically guessed that it would be easier for Bebo to monetize its traffic than it has been for other social nets, since much of the experience is based around rich media. Bewkes also reassured investors that Bebo would not be a standard deal for the company and that future acquisitions would be based on “quantitative returns” as opposed to more strategic notions of gaining scale.

Splitting off access: As they’ve said multiple times, Bewkes insists that selling off the AOL access business is still the plan. He was asked about an unspecified report (almost certainly this one from SAI) suggesting that the company might change its mind on selling the unit. After deriding it as a report on a mere “blog”, Bewkes joked: “Gee I wonder if it’s true.” He then firmly stated that they’re sticking with the plan. So that’s the official line on that for now. In the meantime, AOL access is a profitable business that’s not declining as fast as they expected.

  1. So at least he admits they overpaid, but by how much …. well at D, Rupert Murdoch said he turned it down for $100MM, I had it offered to me for $350MM and turned it down…seems that everyone else saw that is was a declining business that could not and would not have a hope of grabbing a foothold in the US market, apart from Jeff, Ron and Randy. It's a little like a sit com, Jeff, Ron and Randy and the crazy antics they'll get up to next!!! I think you have have to ask the question, that as Jeff has had the access business so publicly on the block for such a long time, why haven't they sold it….no buyers?

    Share
  2. Joseph Weisenthal Friday, May 30, 2008

    Eric,
    I don't think he's quite admitting that completely, but yeah… it's a fine line.

    Share

Comments have been disabled for this post