You Have To Be Joking… Steve Case Ridicules AOL’s $850m Bebo Buy


I couldn’t believe this:

Steve Case, the former head of AOL Tweeted:

“AOL buying Bebo for $850 million and then selling 2 years later for $10 million doesn’t seem like a winning strategy.”

Is this a (Steve) case of a pot calling the kettle black?

The merger of AOL and Time Warner is one of the greatest failures in M&A history.

New York Times May 2009:

When the merger was announced in 2000, the two companies had a combined market value of more than $300 billion.

By the time the deal was consummated in 2001, with Internet stocks plunging and recession taking hold, that had fallen more than $100 billion. Today, the combined market capitalization of Time Warner and the new Time Warner Cable is less than $40 billion.

Steve Case has a nerve criticizing the Bebo buy…

AOL/Time Warner went from $300bn to $40bn. Today Time Warner is worth $19.7bn and AOL is $2.4bn. Combined worth is $22.1bn. Wow. That’s a far, far, bigger loss than Bebo.

Steve Case initiated the Time Warner deal. And it was a great deal for AOL and for him. He walked away with a lot of money.

You would think with such a disaster on his resume, Mr. Case would refrain from commenting on the AOL/Bebo deal. Clearly, Mr Case’s hubris distances him from AOL’s subsequent adventures. Company culture is set by its leaders, imho.

Tom Foremski
Tom Foremski is the Editor and Founder of the popular and top-ranked news site Silicon Valley Watcher, reporting on business and culture of innovation. He is a former journalist at the Financial Times and in 2004, became the first journalist from a leading newspaper to resign and become a full-time journalist blogger.

Tom has been reporting on Silicon Valley and the US tech industry since 1984 and has been named as one of the top 50 (#28) most influential bloggers in Silicon Valley. His current focus is on the convergence of media and technology — the making of a new era for Silicon Valley. He also writes a column at ZDNET.
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