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AOL drops $850M to pick up Bebo

Fri, 03/14/2008 - 8:42am
Brian Santo

Today started a new round of consolidation in the online ad business. Time Warner Inc.’s AOL is buying Bebo for $850 million in cash, while Microsoft said it will acquire Rapt.

AOL, with its purchase of Bebo, not only gets a vital social networking site, it also vastly expands its potential customer base for its new advertising initiative, called Platform A.

Bebo claims a worldwide membership of more than 40 million people; the service is more popular outside the U.S. than within.

AOL CEO Randy Falco said: “What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social Web and the monetization opportunities that leverage Platform-A across our combined global audience. This positions us to offer advertisers even greater reach, and marketers significant insights into the desires and needs of consumers.”

In the past year or so, AOL has spent just under $1 billion on online advertising acquisitions, including Adtech, buy.at, Lightningcast, Quigo, Tacoda and Third Screen Media, all of which have contributed to the development of Platform A.

AOL will combine Bebo’s social networking site with its own AOL Instant Messaging (AIM) and its ICQ personal communications network.

A week ago, AOL launched its Open AIM 2.0, which gives third-party developers access to the AIM network so they can integrate AIM with their own Web sites and integrate AIM as an application for other devices. The key example was an announcement by Apple of a downloadable AIM application for the iPhone.

As a side issue, some speculate an acquisition of this size may take AOL out of the equation in Microsoft’s attempt to buy Yahoo. AOL, News Corp. and Google have been the companies most-frequently mentioned as entities that might have both the interest and wherewithal to invest in Yahoo. News Corp. and Google have both said that they are unlikely to get involved with Yahoo.

Meanwhile, Microsoft is snapping up Rapt, a company that provides ad management software and services. Microsoft has been a Rapt customer, for its MSN service. Other customers include Yahoo, Fox Interactive Media, NBC Universal, Dow Jones and MTV Networks.

Rapt’s software enables companies to price, manage the sale of and provision their advertising assets. The software, backed by advisory services, helps companies design and implement “revenue management processes.”

Microsoft intends to roll Rapt’s products in with its own Atlas Publisher Suite, part of the Advertiser and Publisher Solutions Group. With the inclusion of Rapt, the Atlas Publisher Suite allows Microsoft to provide its customers with integrated asset and inventory management, forecasting, yield and sales management, and ad delivery and operations, Microsoft said.

More Broadband Direct:

• Cablevision rings up 1B Caller ID on TV messages 

• TVB: Satellite growing faster than cable 

• Verizon: New P2P file transfer system faster, more efficient 

• AOL drops $850M to pick up Bebo 

• Zenith Media signs on for Nielsen measurement services 

• Convergys buys software co. from BMI Asia 

• SeaChange extends profitability into Q4 

• Broadband Briefs for 3/14/08

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