Studio City, CA – AOL is close to selling the online social network Bebo, which AOL acquired for $850 million two years ago, for just $10 million to Los Angeles-based
digital media investors Criterion Capital Partners, according to TechCrunch.
VentureBeat reports that sources close to the negotiations between AOL and Los Angeles-based
digital media investors Criterion Capital Partners, said that AOL executives are "livid that the news has broken and
believe Criterion leaked the information.â€
According to the reports, if AOL had shut down Bebo rather to sell it, they would have realized a tax savings of around $380 million, while selling Bebo only allows them to write off the loss against capital gains. So why is AOL selling Bebo? If AOL is pursuing its own acquisition strategy, â€œthe banked capital-gains writeoff could be valuable to an acquirer who could use it to capture the savings,â€ according to VentureBeat.
Lately there has been speculation that AOL is setting itself up for an acquisition with Microsoft and Yahoo mentioned as possible buyers.
VentureBeat Article: http://venturebeat.com/2010/04/06/aol-may-finally-give-up-on-its-850-million-purchase-of-bebo/
Wall Street Journal Article: http://online.wsj.com/article/SB10001424052748704198004575310782837615268.html?mod=WSJ_business_whatsNews
AOL shares up on Microsoft bid target talkhttp://news.yahoo.com/s/nm/20100604/wr_nm/us_aol_shares