The couple who sold social network Bebo for $850m buy it back - for just $1m

The London husband and wife team who founded social networking site Bebo and sold it to AOL for $850 million have bought it back for $1 million.

Michael Birch set up Bebo in 2005 with his wife Xochi, who he met when they were students at Imperial College.

After selling the firm to AOL, it was purchased by Criterion Capital Partners, who Birch has now bought it back from.

“We just bought Bebo back for $1 million,” he tweeted, adding: “Can we actually re-invent it? Who knows, but it will be fun trying...”

When it was sold to AOL, Bebo had amassed 40 million members and trailed only MySpace and Facebook in the United States in terms of users.

The site will be operated by Monkey Inferno, Birch’s San Francisco internet firm.

The Birchs are also developing a private members club in San Francisco, where they now live with their three children, based on London’s traditional private members’ clubs.

Bebo began life as an online address book, and Birch previously admitted to the Evening Standard he was lucky enough to sell it at the ideal time. He said: “We ended up selling it in 2008. It was the perfect time to sell it — it maximised the value. There were others that didn’t sell, and they had a really tough time of it.”

Birch says when the original deal with AOL was signed, he and his wife debated how to celebrate.

“We actually just went to the cinema — it was the first chance we’d had to go without the kids for months. I think we spent all of 10 dollars. There wasn’t a single moment of euphoria. Ultimately it took months and there were uncertainties, but then it was signed.

“We’d sold other firms, so we weren’t going from total poverty — and we didn’t really have anything we needed to spend money on.”

Birch says that in hindsight he would have done things differently at Bebo.

“If it had been executed perfectly it could have taken on Facebook — but we were always in catch-up mode.”