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Bebo's $850M sale: the last girl left at the dance
Michael Birch sold Bebo for $850 million at the absolute peak of social networking. Facebook was too expensive to acquire and MySpace had already sold for $500M, so Bebo was the only target left; a year later it might have sold for half or less. The lesson: that you succeed isn't luck, but how much you succeed often is.
“Sold that company for $850 million. The timing was perfect. Social networking was at its absolute peak. Facebook was too expensive for anyone to buy. MySpace had already sold for $500 million, so they were the only girl left to ask out to the dance. They got a very high bid from a big bidder. That same company a year later might have sold for half the amount or less.”
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Bebo sold to AOL for $850M, and the founders owned 70%
Shaan tells how Bebo, dominant in markets like Ireland (more trafficked than Google there), sold to AOL in 2008 for $850 million, more than MySpace got, with founders Michael and Sochi owning 70% of the company at exit.
$850M
Bebo acquisition price (AOL, 2008) · USD
“decides to sell, sells the company for $850 million to AOL. Huge exit at the time, sold for more than MySpace did. And, um, and so amazing exit for Michael and Sochi, and they went on to do a whole bunch of great things, both philanthropically as well as in business. And they own 70% of the company at the exit.”
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Why Bebo lost to Facebook: real identities and the messy middle
Birch pinpoints two reasons Facebook won: Facebook insisted on real identities while Bebo let users pick symbol-filled names that made friends unsearchable, and Bebo tried to occupy a middle ground between MySpace self-expression and Facebook quality. They were also always in catch-up with far less funding and ~10x fewer engineers.
“They insisted on real identities and we didn't. We were more sort of, we were trying to be the kind of self-expression of MySpace, but with kind of product quality of Facebook and engineering of Facebook. That's where we were trying to kind of position it. And we thought that the middle ground would be the winning ground.”
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How Druckenmiller flipped from Bitcoin skeptic to buyer: the 86% diamond hands
Druckenmiller long called crypto 'a solution in search of a problem,' but Fed money-printing during the CARES Act gave it a problem to solve. The clincher came from Paul Tudor Jones: when Bitcoin fell from $17,000 to $3,000, 86% of holders never sold, proving a base of religious-zealot holders behind a finite-supply asset.
“Then the second thing that happened is I got a call from Paul Jones, and he says to me, uh, do you know that when Bitcoin went from $17,000 to $3,000 86% of the people that owned it at $17,000 never sold it. Well, this was huge in my mind. Here's something with a finite supply, 86% of the owners are religious zealots. I mean, who the hell holds something through $17,000 to $3,000?”