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Selling to private equity may be the worst possible option for Bebo.
The deal gives it no significant industry partner or parent with which it could hope to resurrect itself.
A sale to the Criterion Capital Partners fund, which specialises in turning around underperforming companies, is as good as being placed in to rescue administration.
Such turnarounds inevitably focus on getting companies back on their feet through cutbacks and restructures. But, in Bebo’s case, there’s nothing left to restructure – AOL (NYSE: AOL) has already decimated the company staff over the last year, from the exec level to the developers.
At least a sale to a relevant media player – like MTV, someone who could have absorbed the best bits of Bebo’s pop culture-oriented networking schtick for its own digital program – might have resulted in a clear and definite way-ahead strategy.
But the sale to private equity effectively puts Bebo in a holding pen, for a further period of uncertainty, while Criterion figures out what to do and how.
In this case, a re-sale to the significant player that Bebo needs could still end up happening.
But, if it’s hard to see how Criterion, which recently replaced its whole website with just a company logo, could turn around a standalone Bebo, it’s harder still to see what new tricks it could bring to the site that might attract buyer interest for a future off-load.