AOL brass frankly embarrassed by Bebo buyWhy were AOL CEO Randy Falco and COO Ron Grant so secretive about buying Bebo? Because they knew much of AOL management hated the deal, Silicon Alley Insider reports. Executives from AOL subsidiaries Advertising.com, Platform A and Userplane would all have worked to kibosh the $850 million deal if they'd known more about it, so Falco and Grant kept them out of the loop. Supposedly, Grant and Falco pushed ahead with the deal because they think Bebo makes AOL a more attractive acquisition target. One source called the buy "Grant's last stand." Below, SAI's account of precisely what's to hate about Bebo, according to AOL execs.

  • An inability for AOL to monetize more social-networking inventory. According to our sources, AOL's Advertising.com already cannot monetize all the MySpace (NWS) and Facebook inventory it has available.
  • Flattening traffic growth at Bebo, which contributes to a sense that AOL is buying it at the peak.
  • A 3X difference between the revenue assumptions used to justify the deal to Time Warner's corporate team and the revenue assumptions some AOL senior managers thought were reasonable.
  • Belief that the Bebo founders would bolt the moment the check cleared.