Monday, March 17, 2008

Why Bebo - Why Now?

On Friday AOL announced that it was buying European social network Bebo. The WSJ described it as part of AOL’s attempt to transform itself. I’d add the word “continuing” to that; clearly AOL has been trying to reinvent its business model for quite some time.

The same social media phenomenon is occurring in Europe that is evident here. The EIAA’s recent report on Internet use in Europe documents the phenomenon.
The report says that:
•42% of internet users now communicate via social networking sites at least once
a month, putting it in third place (behind only search and email) in terms of most
popular online activities . . .
•European internet users also enjoy sharing information online:
o The number of people contributing to rating and review sites has seen
a growth of 42% since 2006
o Over a quarter (26%) now share their thoughts on forums

That portrays a bright future for social networks in Europe, and Bebo is already well-established. It’s not as large as MySpace or Facebook, but it’s growing faster than MySpace. According to comScore, since Facebook opened up registration in September 2006 it has grown rapidly in Europe. Bebo is still larger there with a growth rate that exceeds other European sites.

Both WSJ and eMarketer point out that advertising revenue isn’t growing as fast as the networking sites had hoped. Still, the future is here somewhere, and hopefully it’s going to be profitable. Bebo has an interesting video site called KateModern. If you don’t want to watch the 150 videos from the first season to catch up on the story, I’ll give you a hint. It is an interactive video site. By that, they mean you can contact the characters (not the actors, the characters) and discuss the story with them.
Think about the site stats if new visitors watch all 150 videos to catch up on the story line, such as it appears to be. That’s a lot of time on the site. Then all visitors, returning and new, can discuss the story line with individual characters. That’s more time on the site. There’s got to be some room for advertising, sponsorship and product placement here!

The potential is clear. It may be this type of content entertainment site, or it may be something that we haven’t seen yet. But it’s for sure that if we’re not looking, not experimenting, we’re not going to see the opportunity. So we should all watch this AOL venture with interest.
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