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Another rumor has made its way into the collective ears of the masses, and since acquisitions are all the rage in the valley, it is no wonder that this one has been driven home. Bebo may be acquired by Yahoo for the astronomical price of 1 billion dollars.

So, what is Bebo? Why does Yahoo want it, and why in the world should we care? Sit back, relax, kick up your feet and let me introduce you to the courtship of Bebo.

Do be do be do

Bebo is the UK’s answer to Facebook. It is a social networking service (stay with me now), where users can create profiles, share information and basically do everything else that every other social network since man crawled out of the primordial ooze could.

A few of the more interesting features are its ability to include quizzes, slide-shows and polls into your user profile. You can also import video, and embed widgets a la MySpace. In short, wrap up Facebook in a Union Jack and you have Bebo in a nutshell (or a Union Jack, mixed metaphor).

The Economics

So, why would Yahoo want to spend 1 billion dollars on something they could probably purchase off of a kid in his basement for one thousandth of the price? Well, you have to look at the data.

Bebo is the 89th most popular English language website (according to the…ahem, always accurate Alexa).

Bebo was the fastest growing social network according to Hitwise (June 2006).

In March, 2007 Bebo was listed as the most popular website in the Republic of Ireland.

Unfortunately, just being popular does not a 1 billion dollar valuation make. You also need to have traffic that puts you in contention with the big boys (MySpace and Facebook). That’s where Comscore comes in, to give us the hard numbers that Yahoo is working with.

$73 per unique

The scoreboard looks something like this:

At the top of the pile is MySpace with 107 Million unique visitors, far behind that is Facebook with a little over 32 million uniques. Bebo comes in third with just about 14 million visitors per month. Yahoo previously valued Facebook at about 1.6 billion dollars, which means that when you do the math this Bebo deal would be made at about $73 per unique user, not a bad gift for the company that has everything.

Unfortunately, both Facebook and MySpace are growing more rapidly than Bebo.

A Long History of Acquisition

Just to be frank, this isn’t the first acquisition rumor about a possible Bebo courtship, they are almost as popular as Facebook in that regards. Viacom previously hinted at interest, but like all of the others it was little more than smoke and mirrors.

Web 2.0 Roundup

Lets face it, Yahoo might be starting to feel a few pangs of regret about letting Facebook slip through its fingers. They have Flickr, but what they don’t have is the sort of general purpose Social Network that they can leverage as a platform for their other services. If for no other reason, acquiring a site like Bebo would be a relatively painless way to fill this gap.

Do I believe that this deal is going through? Probably. This is a company that has been wanting to seriously enter the social networking space for years and they have proven that they are willing to pay top dollar to do so.

Parislemon tells us why this deal would happen.

HipMojo gives us the lowdown on tech consolidation.

Techcrunch gives us another helpful push toward believing this rumor.

Let me just float this rumor down the pipe, 2009 the Microsoft / Yahoo deal finally gets legs.