aaron+templeman+strategy+report

Templeman A To: Proximity Social Network Team From: Aaron Templeman Date: February 22, 2010 Subject: Bebo Strategy Analysis

We were asked to do a strategy report on a social network. Bellow you will find my strategy analysis of Bebo. We should advise clients to wait on Bebo until Bebo's user trend and source of profit is clear.

Bebo is one of the dominant social networks in the UK. It is available in 12 countries and seven languages (About Bebo). It was founded in 2005 by Michael and Xochi Birch (Bebo). The officers and directors of Bebo are Ziv Navoth, Jessica Alter, and Jim Scheinman (About Bebo). Bebo was sold in 2008 to AOL for 850 million (Bebo). Bebo’s main source of revenue is through web ads and from the AOL buy out. AOL recorded revenues of over four billion and eleven billion in 2008 (SEC Filings, 2010).
 * Profile**

The primary force in the social network marketplace is consumer power. The consumers have no contracts so they can easily move from one social network to another. The suppliers of the market offer relatively the same product, and there is an abundance of social networks available. Facebook and Myspace dominate the supplier power and control most of the market share in American social network market.
 * Competitive Landscape**

Bebo's strategy to deal with the consumer and supplier power is to increase market share by being compatible with popular online media applications and social networks. Bebo has linked their mail system with Gmail, Yahoo mail, and AOL. Bebo has even become compatible with rival social networks by showing updates of Facebook, Myspace, YouTube, Flickr, Twitter, and Delicious. Bebo can now be accessed through phones and users can receive and send SMS messages using Bebo. Bebo is trying to increase market share by becoming the all in one social network (About Bebo).
 * Bebo’s Strategy**

Bebo has made an attempt to become popular in the American market, but has major obstacles to overcome. Bebo stands to attract many potential Gen Y users by trying to become the all in one social network. However, Bebo faces the problem of Facebook and MySpace dominating the market. Another problem that Bebo will face is how it will make a profit. It is unlikely that Bebo can make a substantial profit off of just advertising, so how they decide to get other funds will have an effect on users. If Bebo tries to charge users a small fee it is doubtful it will attract users because users can easily move to another network. Since Bebo is an arm of AOL, which is an arm of Time Warner, it might not need to make a profit if it can draw users to AOL/Time Warner. We should advise clients to wait on Bebo until Bebo's user trend and source of profit is clear.
 * Gen Y implications**

__References__

About Bebo. (n.d.). Retrieved February 20, 2010, from Bebo: http://www.bebo.com/c/about

Bebo. (n.d.). Retrieved February 21, 2010, from Wikipedia: http://en.wikipedia.org/wiki/Bebo

SEC Filings. (2010, February 3). Retrieved February 25, 2010, from AOL Corporate: http://phx.corporate-ir.net/preview/phoenix.zhtml?c=147895&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94b WwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9NjczMTEwMyZhdHRhY2g9T04mc1hCUkw9MQ%3d%3d

SEC Filings. (2010, February 19). Retrieved February 24, 2010, from Time Warner Investor Relations: http://ir.timewarner.com/phoenix.zhtml?c=70972&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94b WwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9Njc3NjAwOCZhdHRhY2g9T04mc1hCUkw9MQ%3d%3d