Earlier this month internet giant AOL agreed to pay a reputed US$850 for social network Bebo. With over 40 million members, Bebo has obvious advertising and marketing potential -- but its only assets are intangible: its name, the goodwill that continues to attract social networkers and the software that drives it. The deal was brokered on AOL's side by Bank of America Securities and Deutsche Bank Securities. Bebo engaged investment bank Allen & Co. when it opted to put itself up for sale.By way of comment it would appear that, while social network sites are highly popular, as a genre they are still in their infancy and it cannot be confidentially predicted that models such as Bebo or Facebook,, which have captured the mood of the moment, have any degree of staying power. They may indeed be quite generation-specific (witness the embarrassment of many young users when discovering that their non-fashionable parents have a presence, or are proposing to establish one, in the same network facility). It should also be borne in mind that the social network site is something that has only low barriers to market entry for competitors and new products. On this basis, it is tempting to speculate that AOL's investment at US$850 only really makes sense if it is seen as conferring a principally short-term benefit upon the acquiring party.
