AOL's Bebo buy was controversial among execs, blog reports

Citing anonymous sources, Silicon Alley Insider suggests that executives of several key AOL divisions were left out of the negotiations due to the opposition to the deal.

Not everyone at AOL was in favor of plunking down $850 million for social network Bebo, the Silicon Alley Insider reported Thursday.

Citing anonymous sources, editor Henry Blodget said a number of senior managers at the struggling dot-com thought--and still think--that Bebo won't turn out to be an ad revenue treasure trove.

Executives at several key AOL divisions, including Advertising.com, the Platform-A ad network, and the Userplane chat software product, were not consulted on the acquisition, according to Blodget's sources. "Our sources believe that Ron (Grant, chief operating officer of AOL), at least, was aware that several senior AOL managers were against the deal," Blodget explained, "and that, as the deal progressed, these managers were intentionally kept out of the Bebo loop ."

So why were those shadowy senior managers skeptical? Well, Blodget wrote, they had some specific qualms about Bebo's profitability, mostly tied to the all-too-common wisdom that social networks just don't bring home the bacon . There were also concerns that the social network's growth wouldn't go on much longer and that its executives would jump ship as soon as they could.

As for why AOL did buy Bebo, the anonymous sources indicated to the Silicon Alley Insider that it might have done so to make AOL itself a more attractive buy. Jeffrey Bewkes , chief executive of AOL parent Time Warner, has said he would consider spinning off all or part of the Web 1.0 mainstay.

An AOL representative, speaking to the Silicon Alley Insider, called the prospect of sealing dissident senior management off from the deal "ludicrous."

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About the author

Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.

 

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