The Real Reason for Bebo Shutdown

They say a picture is worth a thousand words and such pictures do prove the point.

To quote from AOL Ventures EVP Jon Brod’s memo sent to employees:

“it is clear that social networking is a space with heavy competition, and where scale defines success. Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space. AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking.”

On a contrasting note, iBibo, an India based social networking venture, is doing very well inspite of good competition from Orkut (really popular in India), Facebook and even old-dog MySpace.

I think a deeper analysis is called for to understand what makes a social networking site like Facebook or Twitter or iBibo to succeed while many others like Bebo or Friendster to fail.