Can Michael Birch bring Bebo back?

After selling the company he co-founded in 2008 for $850million, Michael Birch bought it back this year for just $1m - but is it too late to save Bebo?

In 2008 Michael Birch sold Bebo, the social networking site he founded with his wife, Xochi, to the digital media giant AOL for $850m. This July he bought it back for just $1m, promising to reinvent the failing brand. Birch says he never imagined he’d own Bebo again, but when the company he started from his San Francisco living room in 2005 seemed certain to fall into obscurity, he felt compelled to step in.

“It seemed like Bebo’s ultimate fate was that someone was going to buy it and use it as an email list or database to get people to join a completely different product,” he says, when we speak on the phone. “We thought we could give it a happier ending.”

Five years ago, Bebo was the third-largest social networking site, behind Facebook and MySpace, with 40 million users. AOL’s chief executive at the time, Randy Falco, described the acquisition as a “game-changer” for his firm. But by the late Noughties, users of social networking sites were defecting to Facebook in huge numbers.

In 2010, AOL offloaded Bebo for $10m to the private-equity firm Criterion Capital Partners, which couldn’t halt the site’s decline. In March 2013, Facebook had 1.11 billion monthly users while, Birch tells me, only a “couple of hundred thousand” sign into Bebo every month.

Birch, who is 43, was born in Hertfordshire and met Xochi while they were both studying at Imperial College London. He says he ended up in San Francisco only “by chance” because Xochi grew up there. Where social media stars such as Facebook’s founder, Mark Zuckerberg, and Twitter’s founder, Jack Dorsey, talk in lofty terms about how their inventions have changed the world, Birch has retained a stereotypically British irreverence. He has posted a spoof product video for Bebo’s relaunch, in which he explains over dramatic background music how Bebo empowered millions to share “potentially career-destroying photos” and how its online doodling feature turned the site into the “single biggest repository of illustrated cock-and-balls ever recorded”.

Birch believes that Bebo’s decline, far from confirming Facebook’s strength, has exposed its fundamental weakness. He learned that “you grow and become very large because of the networking effect, but it can also be your demise because when people start leaving, it tends to be the early adopters and the influencers who go first and they take their friends with them.” He says that Facebook, which floated in 2012, is “overvalued” and can’t maintain its market dominance. Expecting someone to stay on Facebook is like “saying someone is only going to go to one bar for the rest of their life”.

The new Bebo will be a mobile-only app and it won’t compete directly with Facebook. This is partly because Birch believes Facebook’s model is becoming outdated. Having studied his 14-year-old daughter’s online habits, he thinks people will increasingly sign up to several social media apps, and that they will go for more direct, personalised forms of online communication.

Running Bebo will be harder now he’s in his forties, Birch says. He has three children and has lost the “hunger” needed to work 80-hour weeks. As the young tech billionaires who made it big in the Noughties start to approach middle age, they share one common enemy.

“It doesn’t matter how successful or wealthy you are, the people you are most fearful of are the young, up-andcoming people,” he says. “If you ask Google who they are most fearful of, it’s probably the guy in his dorm room, not the big companies of the world.”

While Facebook had over 1.10 billion users in March 2013, Bebo is down to a "couple of hundred thousand". Photograph: AFP/Getty Images.

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

This article first appeared in the 17 October 2013 issue of the New Statesman, The Austerity Pope

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Labour's establishment suspects a Momentum conspiracy - they're right

Bernie Sanders-style organisers are determined to rewire the party's machine.  

If you wanted to understand the basic dynamics of this year’s Labour leadership contest, Brighton and Hove District Labour Party is a good microcosm. On Saturday 9 July, a day before Angela Eagle was to announce her leadership bid, hundreds of members flooded into its AGM. Despite the room having a capacity of over 250, the meeting had to be held in three batches, with members forming an orderly queue. The result of the massive turnout was clear in political terms – pro-Corbyn candidates won every position on the local executive committee. 

Many in the room hailed the turnout and the result. But others claimed that some in the crowd had engaged in abuse and harassment.The national party decided that, rather than first investigate individuals, it would suspend Brighton and Hove. Add this to the national ban on local meetings and events during the leadership election, and it is easy to see why Labour seems to have an uneasy relationship with mass politics. To put it a less neutral way, the party machine is in a state of open warfare against Corbyn and his supporters.

Brighton and Hove illustrates how local activists have continued to organise – in an even more innovative and effective way than before. On Thursday 21 July, the week following the CLP’s suspension, the local Momentum group organised a mass meeting. More than 200 people showed up, with the mood defiant and pumped up.  Rather than listen to speeches, the room then became a road test for a new "campaign meetup", a more modestly titled version of the "barnstorms" used by the Bernie Sanders campaign. Activists broke up into small groups to discuss the strategy of the campaign and then even smaller groups to organise action on a very local level. By the end of the night, 20 phonebanking sessions had been planned at a branch level over the following week. 

In the past, organising inside the Labour Party was seen as a slightly cloak and dagger affair. When the Labour Party bureaucracy expelled leftwing activists in past decades, many on went further underground, organising in semi-secrecy. Now, Momentum is doing the exact opposite. 

The emphasis of the Corbyn campaign is on making its strategy, volunteer hubs and events listings as open and accessible as possible. Interactive maps will allow local activists to advertise hundreds of events, and then contact people in their area. When they gather to phonebank in they will be using a custom-built web app which will enable tens of thousands of callers to ring hundreds of thousands of numbers, from wherever they are.

As Momentum has learned to its cost, there is a trade-off between a campaign’s openness and its ability to stage manage events. But in the new politics of the Labour party, in which both the numbers of interested people and the capacity to connect with them directly are increasing exponentially, there is simply no contest. In order to win the next general election, Labour will have to master these tactics on a much bigger scale. The leadership election is the road test. 

Even many moderates seem to accept that the days of simply triangulating towards the centre and getting cozy with the Murdoch press are over. Labour needs to reach people and communities directly with an ambitious digital strategy and an army of self-organising activists. It is this kind of mass politics that delivered a "no" vote in Greece’s referendum on the terms of the Eurozone bailout last summer – defying pretty much the whole of the media, business and political establishment. 

The problem for Corbyn's challenger, Owen Smith, is that many of his backers have an open problem with this type of mass politics. Rather than investigate allegations of abuse, they have supported the suspension of CLPs. Rather than seeing the heightened emotions that come with mass mobilisations as side-effects which needs to be controlled, they have sought to joins unconnected acts of harassment, in order to smear Jeremy Corbyn. The MP Ben Bradshaw has even seemed to accuse Momentum of organising a conspiracy to physically attack Labour MPs.

The real conspiracy is much bigger than that. Hundreds of thousands of people are arriving, enthusiastic and determined, into the Labour party. These people, and their ability to convince the communities of which they are a part, threaten Britain’s political equilibrium, both the Conservatives and the Labour establishment. When the greatest hope for Labour becomes your greatest nightmare, you have good call to feel alarmed.