TechCrunch reported earlier today that Bebo recently rejected a $550 million offer from BT Group. I have no inside knowledge and maybe I'm just having an extreme case of skepticism today, but I just can't believe this really happened for a few reasons:
1) Benchmark Capital just announced their investment in Bebo in May. They invested $15 million at an undisclosed valuation. But it couldn't have been more than $150 million and was more likely priced in the $50 million range. So, how does a startup's valuation jump by $400 million in two months? And how do the shareholders not accept an offer at the inflated valuation?
2) BT Group, the old British Telecom phone company, doesn't want to get into social networking. With only one of its five operating divisions focused on the consumer communications market and a $37 billion overall market capitalization, it won't spend $550 million to enter social networking. What a failure that would be. Company sources are already rejecting the speculation.
Social networking speculation is in overdrive. First there was Facebook rejecting billion dollar offers and now Bebo rejecting a half a billion dollar offer. On the other end, Tribe.net and Friendster are on their death beds. It just goes to show that one moment a social network can be on top, the next at the bottom. And I think the people sitting on the boards of these companies understand that. Which explains why any of these social networking startups would accept a generous takeover offer in a heartbeat, if they really received one.
Tags: bt, bebo, vc, venture capital.
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