Most would agree that Time Warner (s TWX) overpaid when it bought social network Bebo back in March. Given the challenges faced by the company’s online businesses since then, among them declining ad sales and the difficulty of monetizing social networks, the $850 million price tag for Bebo has come to look even more expensive. And now it appears that Time Warner is having second thoughts. CEO Jeff Bewkes told The Wall Street Journal that:
“I don’t want to rule [acquisitions] out, but they have been the cause of most of the value destruction in media companies, and that certainly has been the cause for a lot of value destruction at our company.”
Bewkes made similar noises earlier at the UBS conference blaming value destruction on some executives.
To be fair, Bebo wasn’t the only expensive acquisition. Time Warner has spent nearly a billion dollars to build AOL’s Platform A advertising business, which continues to struggle. No wonder Bewkes is saying no to any more deals for now! That means one less buyer for all the startups that were looking to flip.
Update: It doesn’t seem like he is sour on AOL as a whole and feels that there is value in the content part of the AOL business. I am pretty sure he is taking a hard look at the AOL content business and figuring out creative ways to keep that growing, as this report from PaidContent suggests.