If you weren’t hot on the heels of the latest developments in the social networking industry, then you might not of heard that the popular UK based social networking site, Bebo, is in decline and it’s parent company, AOL, doesn’t want to invest to turn the business around. Facebook is going from strength to strength, so this has got to be a bit of a kick in the stomach for AOL, who purchased Bebo for $850 million in 2008. The problems that Bebo faces, could be indicative of a long decline in social networking sites that aren’t at the top of the pack. So if you’re not a market leader like Facebook, with lots of users, I presume fewer firms will want to spend money to advertise with you and therefore your revenues will go down. With the rise of Facebook and the decline of others like Bebo, could this well be a new period of dissolution and consolidation in the social media industry?
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