Bebo Founders Buy Back Social Network for $1 Million

Michael Birch tweets that "it will be fun trying" to reinvent the site that AOL used to own and that once was the most popular networking service in the U.K.

LONDON -- Social networking site Bebo is back in the hands of its founders, who have acquired it for $1 million and are ready for a relaunch.

The news comes amid a series of reboots of social networks and social sites that used to have dominant positions and now have new owners, such as MySpace and Digg.

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Michael and Xochi Birch launched the network in 2005 and drew a large teenage audience that allowed the site to compete with MySpace, which was then the most popular social site. At its peak, Bebo had around 40 million users and even became the most used social networking site in the U.K.

In 2008, Internet giant AOL acquired Bebo for $850 million, but similar to MySpace, it soon saw its user base shrink amid Facebook's rise and a lack of investment.

In 2010, U.K. financial firm Criterion Capital Partners led a group of investors that paid only $10 million for it, with the Birchs serving as advisors. After a recent bankruptcy filing, the Birchs bought Bebo back for $1 million in an auction.

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"Can we actually reinvent it?" Michael Birch tweeted on Tuesday. "Who knows, but it will be fun trying ..."

Birch's incubator fund Monkey Inferno will look to boost Bebo's fortunes again.

Said Monkey Inferno CEO Shaan Puri: "We know the odds are stacked against us, but we love challenges, and the Bebo users deserve better than what they have received the past few years."

The company didn't immediately detail its plans, but highlighted that Bebo used to be known for its high engagement, with users spending more than 40 minutes per day on the site.

Twitter: @georgszalai