AOL sold its social networking investment Bebo last week for $10 million, after buying the company for $850 million two years ago. That transaction brings the total amount that media companies have lost on social networking sites over $1.5 billion, according to The Guardian.
News. Corp’s MySpace acquisiton is another horribly misguided social networking investment. Last year, Mr. Murdoch’s company faced loses in the nine figures after getting locked into a 12-year lease worth $350 million for office space that MySpace does not need.
Meanwhile Facebook doubled its revenue last year to $800 million, and it’s not for sale. Mark Zuckerberg is saving media companies from themselves because, as The Guardian points out, the barriers to entry around social networking are virtually none existent. Who knows what’s being cooked up in a Harvard dormroom to make Facebook obsolete?