Jason Del Rey

Recent Posts by Jason Del Rey

After Pocketing More Than $500 Million From Bebo’s Sale, Founders Buy It Back for $1 Million

The tech world let out one giant guffaw when AOL coughed up $850 million for the social network Bebo back in 2008. Five years later, could Bebo’s husband-and-wife co-founders Michael and Xochi Birch, who pocketed more than $500 million from its sale, prove everyone wrong?

Battery Club creator and chief tour guide Michael Birch

We’ll be able to find out at some point soon; the Birches today agreed to pay a bit over $1 million in an auction to re-purchase Bebo.com.

“I can confirm, that Michael and Xochi’s holding company (MXB Holdings) won the competitive Bebo.com auction this morning in Los Angeles with a final bid of $1M ($1,010,000 to be exact),” Shaan Puri, CEO of the Birch’s startup incubator Monkey Inferno, wrote in an email to AllThingsD. “Bebo will be re-invented by The Monkey Inferno, in the coming months.”

At the time of the sale to AOL, Bebo was a second-tier network here in the U.S. — a distant third place behind Facebook and Myspace. But it was big in Birch’s U.K. homeland. Then the combination of the financial market collapse, the continued rise of Facebook and AOL’s failure to integrate it successfully into its instant messaging platform led to its demise.

AOL sold it off for $10 million to investment firm Criterion Capital Partners, which ended up putting Bebo through Chapter 11 bankruptcy. Enter the Birches to the rescue.

The Web hasn’t been that hospitable to large-scale turnarounds of this kind. But it will be interesting to watch what comes next.

At the same time, it’s hard not to think this is now just another toy for the Birches that falls somewhere on the cost spectrum between the Mercedes-Benz S-Class AMG and Land Rover Defender they bought shortly after the sale and the $13 million property they bought in 2009 to create The Battery, their own private club in San Francisco set to open later this year.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work