Blog Post

Private Equity The Worst Sale Option For Bebo

Selling to private equity may be the worst possible option for Bebo.

The deal gives it no significant industry partner or parent with which it could hope to resurrect itself.

A sale to the Criterion Capital Partners fund, which specialises in turning around underperforming companies, is as good as being placed in to rescue administration.

Such turnarounds inevitably focus on getting companies back on their feet through cutbacks and restructures. But, in Bebo’s case, there’s nothing left to restructure – AOL (NYSE: AOL) has already decimated the company staff over the last year, from the exec level to the developers.

At least a sale to a relevant media player – like MTV, someone who could have absorbed the best bits of Bebo’s pop culture-oriented networking schtick for its own digital program – might have resulted in a clear and definite way-ahead strategy.

But the sale to private equity effectively puts Bebo in a holding pen, for a further period of uncertainty, while Criterion figures out what to do and how.

In this case, a re-sale to the significant player that Bebo needs could still end up happening.

But, if it’s hard to see how Criterion, which recently replaced its whole website with just a company logo, could turn around a standalone Bebo, it’s harder still to see what new tricks it could bring to the site that might attract buyer interest for a future off-load.

2 Responses to “Private Equity The Worst Sale Option For Bebo”

  1. Skeptic Jones

    What turn arounds has Criterion been party to? This Adam Levin guy sounds like a scam artist. I bet they fleece bebo of its assets and sink the ship. Another scam of shareholder value!

  2. Yes, if you still work there (and that has to be a dwindling crowd) and if you didn’t get bought out the first time around – it is a painful option for sure. However, anyone who did get bought out of this on the sale to Time Warner should be just thanking god for such an outcome. This is potentially the worst deal in the 21st century. $900M incinerated. Amazing. all that said, I would not count out Criterion just because they are not a traditional media player or another platform. Other than Facebook, I don’t know of anyone making any money on this sort of social media – so a more business like look at things might help the matter out.