This morning after AOL said it would spend $850 million to buy social networking site Bebo, I had a chance to chat with Ron Grant, AOL’s chief operating officer. What follows is an edited version of our conversation.
OM: Why Bebo?
GRANT: Bebo is one of the best social media companies out there. They are more than a one-dimensional company, and they have embraced their social media space. Three things attracted us — it is utilitarian and has a high level of engagement, its rich media aspect, and their ability to understand marketing and engagement marketing.
OM: What are the plans? Why can AOL make it work where MySpace and Facebook have challenges?
GRANT: Bebo is going to be a cornerstone of our global expansion. It is difficult to monetize with search, but a good platform to monetize with display advertising. Platform A has a better opportunity to monetize this. Bebo provides a unique relationship with advertising. It is different from search and search keywords.
OM: How will Bebo fit in with AOL?
GRANT: This is one of our core focuses, and this is going to add assets to the mix. It will stand alone from the unit and we will talk more about it when the deal closes.
OM: What’s going on with this deal and Time Warner’s plans for AOL? It’s like Time Warner is schizophrenic.
GRANT: The whole focus has been the turnaround of AOL, making this a viable company and creating long-term value. Regarding speculation around Time Warner, we in AOL are getting support. Time Warner spent a billion on acquisitions for Platform A and now another $850 million. We have been getting tremendous support from Time Warner to build long-term value for this company.
OM: Are there online video synergies with Bebo and Time Warner?
GRANT: There are synergies across all the media, Time Warner and throughout all of the entertainment industry. Bebo is open, and we can work with everyone.
OM: Will we see AOL making more deals soon?
GRANT: I can’t really speculate on additional acquisitions, but we will be aggressive.