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Bebo founder Michael Birch in Dublin in October 2011 for the Dublin Web Summit. He is reportedly buying back the social networking site he created for $1 million. Photograph: Frank Miller/The Irish Times

Michael Birch is buying back social networking site Bebo for the rock-bottom price of $1 million (767,000) in yet another attempt to turn it into a product people use.

AOL bought Bebo in 2008 for $850 million in cash. AOL was trying hard to buy and merge its way into relevancy, and saw Bebo as an opportunity to enter the hot social networking space and turn its business around.

At the time, AOL was laying off thousands of employees as it tried to refocus. Bebo was meant to be the cornerstone of AOLs online strategy.

Despite the fact it was a second-tier social network falling far behind Facebook and Myspace, Bebo still had a respectable 40 million total users and 22 million uniquely monthly visitors as well as strong security features and a functional developer platform for third-party applications.

But the acquisition turned out to be a total disaster. Bebo did not live up to its price, and the business was declining. AOL sold it to digital media investors Criterion Capital Partners in 2010 for a reported $10 million. Selling the property, rather than shutting it down, allowed AOL to write off the loss against other capital gains.

Significant stake

Mr Birch then rejoined Bebo as an investor and adviser in late 2010 by purchasing a significant stake in the company. Kevin Bachus, an early member of Bebos Microsoft Xbox team, came onboard as chief product officer, and Bebo was reportedly receiving between 10 million to 12 million unique visitors a month and doubled its mobile traffic to 1.6 billion page views per month.

Bebo never gained any real traction, occasionally popping up with announcements of updates and partnerships.

It continued to be deadweight, and in April 2012 the minority shareholders (including Mr Birch and his wife, Xochi Birch) filed a $5 million suit against Criterion for destroying the site (because before then, it was doing so great). Then in May, TechCrunch reported that Bebo filed for a Voluntary Chapter 11 bankruptcy petition.

Read more from the original source:
Bebo being sold back to founder for just $1m