Bebo is a social networking website that was launched in 2005.
When Bebo was launched, a registered user would receive a profile
page: where they could post information about themselves, and interact
with other Bebo users. By default, Bebo profiles were set as private
profiles; the option existed to set a profile as a public profile.
Bebo was founded by two people; husband and wife: Michael Birch
and Xochi Birch.
Michael Birch is an English entrepreneur - he founded a range a
tech companies, like Ringo.com, before founding Bebo - and Xochi
Birch is an American entrepreneur, who, likewise, founded a range
of tech companies before founding Bebo. Michael Birch and Xochi
Birch met in London in the early 1990's, moved to California in
2002, and launched Bebo in 2005. Bebo proved hugely popular, attracting
fifty million registered users by 2008, and it was sold to AOL for
$850 million (then £417 million) in 2008.
The purchase of Bebo - for such a large sum of money - proved a
disaster for AOL: who sold Bebo, two years later, for a nominal
amount to Criterion Capital Partners. The BBC's technology and Internet
correspondent Rory Cellan-Jones stated that AOL's decision to purchase
Bebo for £417 million as "one of the worst deals made
in the dotcom era". In 2009, Randel A. Falco, the CEO of AOL,
was replaced by Tim Armstrong: it is claimed he was replaced due
to his decision to purchase Bebo.
While it has not been confirmed, it is believed that Criterion
Capital Partners paid below $10 million for Bebo; equating to a
$840 million loss for AOL. Under Criterion Capital Partners management,
Bebo underwent a redesign, and, a variety of technical issues ensued;
eventually resulting in bankruptcy. In 2013, Criterion Capital Partners
sold Bebo to Michael Birch and Xochi Birch for $1 million. Therefore,
in the span of five years, Michael Birch and Xochi Birch managed
to profit over $500 million from the sale and repurchase of Bebo.