There is a quite a bit of day-after analysis of the AOL-Bebo purchase. The upshot? The verdict is still out on whether the $850 million price tag was worth it. As Kara Swisher at BoomTown writes:

According to the several sources who were privy to Bebo’s
financials, for example, Bebo’s revenues for 2006 were only $7 million
with $3 million in EBITDA (earnings before interest, taxes,
depreciation and amortization). In 2007, the results are still small,
with $20 million in revenues and $5 million in EBITDA.

Using 2007 results, that means Time Warner’s (TWZ) AOL paid a handsome 42.5 times revenues and an incredible 160 times EBITDA.

True. But I ask: when has a back-of-the-envelope calculation for a dot-com start-up ever looked sensible by ordinary accounting standards?

There’s another benchmark required here to make sense of this deal. Go back to Murdoch’s shrewd acquisition of MySpace for $580 in 2005 when social networks were in the "nothing special" category. Of course, a year later Murdoch more than made his money back on MySpace when Google swooped in and paid $900 million in a mega ad deal, a deal that Google is still trying to figure out how to monetize. Score that one: wise investment for News Corp, questionable move for Google.

And what about Bebo and AOL. Bebo, hands down, wins here. The world’s other social network was never going to catch Facebook or MySpace and could very likely be overtaken by LinkedIn. But AOL’s web traffic in the UK should bring it some life. And, by the same token, AOL is snapping up a site that is just ahead of it in traffic in the UK, according to ComScore. If you look at the chart below, t’s not inconceivable to think the combined AOL-Bebo could actually leapfrog Facebook and MySpace (lumped into Fox Interactive Media on the chart below).

But of course, as Google knows, it all comes down to monetizing the site, which equates to figuring out a strategy of how to sell ads on the youth-friendly Bebo. ZDNet’s Larry Dignan reckons this won’t be a repeat of Google-MySpace. Time Warner reps know how to sell adverts.

There is one immediate-term loser here: Yahoo. No doubt, AOL will kick off Yahoo as Bebo’s in-house search engine.