Did Time Warner just write down AOL's acquisition of Bebo? AOL accounted for $2.2 billion of the $24 billion writedown of goodwill that the media giant announced during its fourth quarter earnings
call. A reduction in the "carrying value of goodwill" means that an acquisition or investment is no longer worth what the company originally paid for it. Google, for instance, recently wrote down $1
billion of its investment in AOL, and is now subsequently calling for Time Warner to offload the beleaguered company altogether.
In any event, the $2.2 billion charge is an acknowledgement
that AOL overpaid for some of its investments. Even though it doesn't say in the earnings release, Bebo, the $850 million social network--AOL's biggest acquisition last year--has to be at the top of
that list. But by how much did AOL overpay? TechCrunch's Erick Schonfeld guesses Bebo is now worth around $200 million.
Other recent AOL acquisitions that could now be worth less include
Quigo, Tacoda and Third Screen Media (all advertising companies). Overall, the company's ad revenues were down 18% in the quarter to $507 million. For the year, ad revenues actually rose 6% to $2.1
billion.
Read the whole story at TechCrunch »