Viacom considers bid for Bebo
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Viacom, the US media group, is considering a bid for Bebo, the social networking site.
The acquisition would represent the latest attempt by Viacom to regain ground lost to Rupert Murdoch’s News Corporation in the social networking and user-generated content realm.
Viacom lost out to its rival in a bidding war last year for MySpace, now the world’s leading social networking site, when News Corp paid $580m (£304m) for the young company. The acquisition caused News Corp’s rivals to look again at the value of sites that allow users to share their own messages, photos, music and videos.
News of Viacom’s interest in Bebo came a day after the media group announced a deal with Google to distribute its content through thousands of niche websites and blogs affiliated to the internet company.
The company is also believed to have run the rule over Facebook, number two social networking site in the US behind MySpace, as its double-digit growth in cable network advertising sales begins to slow.
Bebo has far fewer users than the sites in the US but is number one in Ireland and second in the UK. It claims 25m registered users worldwide compared with more than 90m for MySpace.
Viacom has approached Bebo but its plans are at a very early stage. The media giant is understood to have instructed its mergers and acquisitions team to look at the company.
Michael Birch, British founder and chief executive of San Francisco-based Bebo, told the FT he was in no hurry to sell – his company was still growing rapidly.
He said he received approaches about once a fortnight to sell Bebo. Many were from traditional media groups “like Viacom”, although he declined to comment on whether the US group was a potential bidder. One recent rumour suggested BT, the telecoms group, had offered £300m but had been told to think “north of $1bn”.
“That one rumour raised our profile in the US more than anything else,” said Mr Birch. “It is a ridiculous amount of money.” Asked if he would have sold to BT had it offered £300m, he said: “If I sell it, I’d have to start from scratch.”
Mr Birch and Xochi Birch, his wife and co-founder, have been visiting UK media companies over the past few days. They included ITV, the broadcaster, but it is understood a possible sale was not discussed.
Additional reporting by Andrew Edgecliffe-Johnson