AOL CEO Tim Armstrong may finally have made good on his promise to figure out what to do with Bebo, the company's pricey digital albatross, by the end of the spring.
Mashable reported on Wednesday morning that Bebo had been sold; The Wall Street Journal followed up later in the day by saying that the deal is "close" but not complete and that the buyer is Criterion Capital Partners, a hedge fund based in Studio City, Calif. An AOL representative did not respond to a request for comment; a price isn't yet clear, but the Journal noted that Criterion's buys tend to be in the $3 million to $30 million range.
That's a big drop in valuation. AOL, when the social network was still a hot commodity among teenagers in several European countries, and when it was still possible that having a social-media property in-house could help it gain international reach as well as potentially rival Facebook. Bebo had over 40 million members at the time and looked like it was poised to keep growing, but the deal is now considered to have been wildly overpriced and now short-sighted as Facebook continued to eat up more and more market share.
Not all executives, rumors indicated. A year later, continued management shakeups at AOL , and Armstrong immediately started , not a communications and access company. Two months ago, AOL .
Since his installation as CEO, in public appearances Armstrong hasand reminded critics that he wasn't yet at the company when it went through. In April, the company confirmed that if a buyer could not be found by the end of May .
Sources have indicated that AOL considered the possibility of shutting down Bebo to be a serious last resort: Shutting down the site would have been expensive, and could have resulted in even more unfortunate press for the company than a quick deal to get it off its hands.