AOL is selling, or shutting down, Bebo, the networking site it bought in 2008 – for $850 million.

A recent internal AOL memo summed it up: “It is clear that social networking is a space with heavy competition, and where scale defines success. Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space."

When AOL purchased Bebo it was a popular British site, but it never got a grip in the US, entering the fray of social media as it was powerfully on the rise.Continue reading...

Foot Locker will shutter 117 locations in 2010, mainly Foot Locker and Lady Foot Locker stores. The shoe chain plans to cut 120 jobs in the process, though it has not been announced how many of those will be salespeople. For the current fiscal year, the popular shoe brand has opened 37 stores, while it closed 190 stores, and updated or relocated 160 others.

By cutting stores and its workforce, Foot Locker hopes to streamline and reorganize its business to mitigate the negative consequences of the recession and sluggish sales. Richard A. Johnson, former CEO of Footlocker's European outfit, was appointed to run the struggling brand, which is comprised of Foot Locker US, Footaction, Kid's Foot Locker, and Lady Foot Locker.

"We expect the consolidation of our Foot Locker businesses under the direction of one management team to help us clarify our Foot Locker family of brands position in the retail marketplace," said Ken Hicks, Foot Locker Inc.'s CEO.Continue reading...

DVD sales are down, way down, by a whopping 13 percent in 2009, in fact. As consumers curtail their purchases of DVDs, it would seem logical that the DVD rental business -- Netflix's specialty -- would be booming, right?

Wrong. And for a few reasons.

Fortunately, Netflix is a dynamic, self-aware brand. It realized early that DVDs rented via the mail would eventually be replaced by on-demand streaming rentals. So Netflix took steps and positioned itself for the future.

Warner Bros. Studio, however, has other plans, and is crippling Netflix's marketing and distribution strategy at its very source.Continue reading...

Much has been written about how Tiger Woods is in the gutter and how his sponsors are scrambling to do damage control or distance themselves from him. But the victim of his transgressions that stands to lose the most is the game of golf itself, or more specifically, the Professional Golf Association (PGA).

For the last decade, the PGA has been buoyed -- if not outright carried -- by Tiger Woods. In many ways, Woods took the sport mainstream the same way Michael Jordan elevated the NBA a decade earlier. Thanks largely to Woods, PGA Tour prize money rose from $70 million in 1996 to $278 million this year. And now that Woods is taking an unpredictably long break from the sport, the PGA could be in serious trouble. How bad might it be? The sport experienced a taste a year ago when Woods took time off from the circuit for knee surgery.Continue reading...

It will probably go down as the single worst merger in communications history. When Time Warner and AOL tied the knot in 2001, CNN founder Ted Turner, Time Warner’s Vice Chairman at the time, called it "better than sex, " according to USA Today. Though the deal was then valued at $163 billion, AOL's value when it spins off on December 9 is likely to be less than $3.5 billion.

What went wrong? Just about everything. The merger that was supposed to "herald the future of content distribution via the Internet" was bad from the beginning. It was hampered by everything from a genuine culture clash, to incompatible business models, to nagging problems with the Justice Department and the Securities and Exchange Commission.Continue reading...

In an effort to rework its brand structure, La Perla will consolidate its current lines into three core brands. Their newest line, Villa Toscana, which offers lingerie, beachwear and loungewear designed for contemporary, "aspirational" customers, will absorb La Perla's Anna Club, Aquasuit and Joelle brands.

The Black Label, Limited Edition and Bridal labels will be consolidated into the highest-end line, called simply La Perla. La Perla Studio, Malizia and Glamour will combine to form La Perla Studio.

In rethinking its strategy, La Perla's overall goal is to distance the brand itself from its fairly recent, fashion-oriented positioning. Trend-driven lingerie was good for the brand, but was beginning to create a disconnect with consumers.Continue reading...

Luxury's turbulent ride through the harsh global economy continues, with Italian designer Versace the latest casualty. The company is closing all its boutiques in Japan, following Louis Vuitton, whose parent company abandoned plans to open a large store in Tokyo.

Luxury demand dropped 10% in Japan from 2007 to 2008, says the Yano Research Institute, and is expected to shrink again this year. This follows a global trend: A recent Bain report predicted luxury sales would fall 10% this year worldwide and 15% in the US.

The affluent consumers who helped luxury survive past recessions are turning away. A Luxury Institute survey found that 62% of the wealthy said they were changing their views on luxury purchases, with reasons ranging from being more budget-conscious to being more sensitive about appearances. At a Wharton School luxury panel last May, Roxanne Paschall, senior merchandise director at Bottega Veneta, observed: "It's a little bit gauche to be ostentatious with your purchasing. [Customers] don't want to flaunt."Continue reading...