When Michael Birch, right, and his wife, Xochi, sold the social network Bebo to AOL for $US850 million in 2008, their combined stake of 70 per cent earned them $US595 million. Photo: Rory Cellan
Bebo founder Michael Birch has bought back the social networking site for $US1 million ($1.08m), just five years after it was sold for a staggering $US850 million ($921m).
Birch, 42, tweeted that he would attempt to ''reinvent'' the website, which has struggled in the face of the meteoric rise of other social networks such as Facebook and Twitter.
British-born Birch set up Bebo, which can be used to post blogs, photographs, music, videos and questionnaires, with his wife Xochi in 2005.
Cashing in: Michael Birch.
Initially Bebo - which stands for Blog Early, Blog Often - proved to be popular, especially in Europe.
In the United Kingdom, it once threatened MySpace's position as the premier social networking site before Facebook began to dominate.
The 70 per cent combined stake that Birch and his wife held earned them a staggering $US595 million ($645m).
But, with Bebo overshadowed by the rise of Facebook, it was nearly impossible to turn the once-crowded online hangout into a moneymaker.
Two years later, AOL unloaded the social network on Criterion Capital Partners, a private equity fund in Studio City, reportedly for less than $US10 million.
In May, Bebo's future could not have appeared more grim. It filed for Chapter 11 bankruptcy protection as Criterion struggled with minority shareholders, including Birch.
Smaller shareholders had requested a receiver be appointed to take control of the company.
Bebo was under the receivership of the Burke Capital Corp, which was handling an auction of its assets.
On Monday, Birch tweeted: ''We just bought Bebo back for $1m. Can we actually re-invent it? Who knows, but it will be fun trying...''
It's a deal reminiscent of the late Kerry Packer selling Channel Nine in 1987 to business tycoon Alan Bond for a reported $1.05 billion and then buying it back three years later for a mere $250 million, when Bond's empire was collapsing following a scandal.
Packer later quipped: "You only get one Alan Bond in your lifetime, and I've had mine".
Packer was then able to re-invest the proceeds in a 25 per cent share in the Foxtel pay TV consortium.
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