Bebo is getting ready to announce its first new activity since being off-loaded by AOL in the next few weeks, says Adam Levin, the managing partner at buyer Criterion Capital Partners, who has been named CEO of the social network.
You might usually expect a turnaround specialist to cut costs and lay off staff. But, in Bebo’s case, the cutting had already been done by AOL (NYSE: AOL) — the site now has only 25 to 30 staff, and now Criterion will need to re-invest, particularly on engineers, Levin tells paidContent:UK.
“AOL left Bebo somewhat dormant, so we will be staffing up, we’ll be announcing several new key hires in the coming weeks.”
Bebo will be moving its San Francisco global HQ from AOL’s Folsom Street office to new premises at the Embarcadero this weekend, a switch Levin says will provide existing staff with “a new start”. “Outside of the US, we will still have staff – we wont be shutting offices – we’ll just be moving (UK) offices from the AOL office.”
So what’s the future for Bebo run by a merchant bank?
Levin points to Facebook’s blossoming from an Ivy League sideline in to a mainstream network. “AOL looked to replicate much of that (in Bebo) and have a similar strategy. But we have really strong niche user groups that allow us, from an advertising perspective, to reach a specific targeted group.”
Levin rejects the suggestion that the social networking game is over, won by Facebook, pointing to Bebo’s differentiator: “Tween is our core demographic. It allows a tween or user an opportunity to create a customisable experience, as opposed to a Facebook, where they can interact with their friends. A 14-year-old may not have the opportunity to customise their house or buy the car that they want, but they can select their Bebo layout in the way they want to see it.
“Advertising will be the main revenue driver. There are also other opportunities that Bebo, under AOL, didn’t look at. We’re looking at increasing gaming, doing social currency.” And Levin brushes aside the suggestion that advertising on social networks is proving too difficult, saying “CPMs are lower than many expected across the board” and expecting that demographic targeting can inflate those prices.”
Levin won’t say how much Criterion paid for Bebo, just: “All of the needs of my investors in Criterion were met, as well as the needs of AOL — it was a win-win.”
“The new ownership structure gives us the ability to be aggressive in innovation and create a platform that’s going to be engaging to users,” says Levin, who was previously CEO of mobile video distributor CinemaElectric.
“We’re striking a bunch of deals out of the gates. Several different partnerships to enhance the functionality. Based on my background in mobile, we have been able to sign several deals that will enhance the footprint that Bebo has today dramatically over the next 60 to 90 days.”
Mobile sounds like a big focus now. “AOL had no mobile advertising (on Bebo), yet was seeing 200 million impressions on mobile monthly. There are some low-hanging fruit on the monetisation side.” We expect a deal with a big mobile advertising network, as well as amping up in-house mobile ad sales.
“We’re actively looking and talking to people about other properties that could add strategic benefit to Bebo.”
Bebo under Criterion is keen to stress a long list of numbers it says remain high – 1.2 million daily users, 52.4 million people have created a profile or visited in the last year, a quarter of whom are in the US. But Bebo’s traffic, along with MySpace’s, has been falling over the last year and Levin acknowledges some effort must be made to bring those users back. The site will run a “Free Love Day” in the UK next week as some kind of embrace for users there.
“Bebo’s a great platform today – we have an incredible user base,” Levin says. “There are lots of naysayers who say it has declined, but it allows users to have a tremendous amount of self-expression.”
Criterion’s portfolio numbers a startup charter school, a commodity goods manufacturer and a specialty jewelry chain but it’s media and tech background is limited beyond Levin, so he’s brought aboard online ad industry veteran Richard Hecker and partner Paul Abramowitz, who once helped sort out Enron’s post-collapse debt.
And if Criterion does manage to get Bebo back on course, what then? On his own role, the company’s manager says he’s the best man for the job right now but acknowledges: “There may come a time when someone more qualified or has certain attributes that I can’t contribute – so we’re open to anything and not ruling a change out at any time.”
And, naturally, Bebo may yet be sold again in future: “We are a merchant bank, a private equity fund – so we do look for deals that will return money to our investors at the end of the day. So we will be looking for a liquidity event at some point, but not for now.”