Bebo has reportedly appointed advisors to examine offers made for the sale of the prolific social networking site. Jon Card reckons its founder, Michael Birch, should cash in while he can
I wrote last year that the founders of fast-growth web-based businesses were well-advised to sell them while the going was good. Some of these businesses can fall as rapidly as they rise so why not cash in I argued? Today we hear that Bebo, one of the UK’s hottest social networks could be progressing down that road. However, the company are downplaying any move towards the exit, despite reportedly hiring advisors who could help them with a big equity sale.
I spoke to Michael Birch last year about the prospect of him selling and he gave me every impression that he wasn’t. Bebo was still a great place for him to unleash his many ideas and he felt that he might get bored even with tremendous wealth. I got the impression that here was a man who just didn’t fancy spending the rest of his life on the beach and was actively enjoying his work. However, six months is a lifetime in the world of social networks – things have changed.
According to Comscore, Bebo has now been supplanted as the Britain’s biggest social network by the mighty Facebook. Not that this should concern Birch overly; his site is still hugely popular among teens and with 11million plus users he leads MySpace by some distance in the UK. Globally the score is still to the favour of the Murdoch-owned site but nonetheless Bebo is doing well.
As one of the ‘Big Three’ the site is under permanent scrutiny. Bebo has always coped well with this and has a strong customer service/safety programme to protect its young users. However, social networks are a fickle world and Birch know this: “The community can very quickly become alienated and can effectively use the tools on the site against you,” he told me last year.
When you recall what happened to Facebook founder, Mark Zuckerberg, at the end of last year these words seem almost prophetic. The 24-year-old was publicly mauled over his company’s decision to employ the Beacon advertising system. It wasn’t just the press either as dozens of ‘anti-Facebook’ groups sprung up on the site itself, many of them filled with hysterical rants against the site – it must have been galling. Birch certainly thought so and had sympathy with for the young entrepreneur and thought the affair was overblown.
So as an entrepreneur, ask yourself this question: if you were faced with these pressures and were offered £1bn would you turn it down?
Fill your boots Michael!