By Emma De Vita Thursday, 01 May 2008

The MT Interview: Joanna Shields

A Silicon Valley veteran who was there for the first dot.com boom, she's now here to lead Bebo into a Web 2.0 future with AOL. But can this expert dealmaker and networker make it work?

This must go on record as one of the more relaxed MT profile interviews. Joanna Shields, president of social-networking website Bebo, is curled up in an armchair in the sitting-room of her Kensington duplex, painting her nails. She then offers to do mine.

So here we are, being girlie together in her 'tiny little flat', with the washing machine churning in the background - more Hello! magazine than MT. Shields, an attractive, impossibly young-looking 46-year-old American, is the cool big sister you never had. With her sapphire blue dress, chestnut brown hair and honey-coloured complexion, she looks every inch the laid-back West Coast dot.commer - the only thing missing are the flowers in her hair. Down-to-earth and quick to crack up in laughter, her mellifluous delivery leaves you charmed.

But don't be seduced into thinking Shields is all San Fran love 'n' peace: she's also the driven, multi-million-dollar dealmaker and business brain behind Bebo; flag-bearer of the Web 2.0 avant-garde - and a single mum, to boot.

We meet at her flat for a couple of reasons. Shields has been shuttling to and from the US to tie up Bebo's cool $850m acquisition by AOL; and Bebo's cramped London base is not a cover-shoot environment. In 2007, Bebo poached Shields from Google, where she had been its MD of Europe, Russia, Middle East and Africa.

'People thought I was insane to leave the most successful company on the planet,' she purrs. 'I loved my job and my team and it was a tough decision.' It was only after four months of persuasion that she caved in. 'I could see things were changing on the internet and I wanted to be in the front of that change. I wanted to understand this lifestyle cultural shift of the web.' So social networking is where she has wound up.

Bebo, which stands for Blog Early, Blog Often, was founded by serial online entrepreneurs Xochi and Michael Birch in 2005 (he's the Guinness-drinking, long-haired geek who is happiest writing code, she's the financial brains). Bebo has 11.6 million unique users in the UK and 42 million members worldwide, mostly teenagers who use it as a place to chat, share photos and make friends. Users spend an average of 33 minutes on the site per usage day, making it one of the world's 'stickiest' social networks. In the US, it ranks in popularity far behind Facebook and MySpace, but it is one of the top networks in the UK, Ireland and New Zealand, and is soon to expand further into Europe.

Financially, Bebo is profitable. Turnover is thought to be over £9m for 2007, and expected to reach £24m in 2008, but its figures aren't public. The AOL purchase of the company was considered to be a good-value deal, with AOL paying $37.95 per Bebo user (based on the ComScore figure of 22.4 million active Bebo users in January). To put this into context, Microsoft's $240m 1.6% stake in Facebook works out at $149 per user, and News Corp's $580m purchase of MySpace in 2005 comes out at between $54 and $91 per user. To non-web aficionados, these figures still look like the workings of a Web 1.0 madhouse, but the purchase price is deemed realistic for those wanting to invest in the financial potential of social networking. No matter that no-one has worked out how to make it pay yet ... it's more about potential than profit, and, according to internet analyst eMarketer, the market for advertising on social-networking sites will rise above $2bn this year from $480m in 2006, and reach $4.1bn by 2011.

AOL is neither an internet ingenue nor golden child. Owned by Time Warner, and still derided for its closed approach to the internet during the web's formative years, it has struggled to revive itself since its move from a subscription-based ISP to an ad-funded internet service. It's seen as a bit of a has-been, with an ageing demographic. 'It's funny, because a lot of folks said to me: "AOL - jeez, Joanna",' says Shields, 'but when we tell the story, you'll understand - it's amazing, it's fantastic, it's so well thought out.'

It's easy to appreciate Bebo's appeal to AOL. Bebo instantly gives AOL a piece of the social-networking pie, bringing a younger audience and a global reach. AOL will now have more than 80 million users, and its instant messaging services could prove a potent offering in combination with Bebo. Ron Grant, AOL's COO and Shields' new boss, has described the deal as a way for AOL to return to its roots - that is, as a way for people to connect. Apparently, it's a marriage made in heaven: Bebo provides the users and AOL the technology to ring up the cash. Let's see how long the honeymoon lasts.

AOL plans to monetise Bebo through its Platform-A ad-serving network, built on the technology of the acquisitions it made during a recent $1bn spending spree. How well AOL can execute Bebo's transition from social-networking community to money-spinner - and without alienating users - is anyone's guess. 'There's no way of saying AOL is executing very well right now,' says Jupiter Research analyst David Card. 'These social networks will prove to be very interesting marketing platforms, but it's early in the development of that kind of business and people are still learning to do it properly.' On the other side are those sceptics who say social networking may be the 21st-century's CB radio.

You get the impression that Shields thrives on this kind of frontier exploration. She has a fascination with the new and an excitement for the untested that has led Bebo to try some inspired initiatives. Explains Shields: 'The web is evolving and no-one has quite cracked how it's going to work, but we did two things on Bebo that were really innovative. One is commissioning original content and integrating various brands' messages into that content.'

For those unfamiliar with online-speak, this translates into Bebo's commissioning three online video soaps. The first, KateModern, included product placements for Procter & Gamble, Orange, Disney/Buena Vista, Paramount and Microsoft, with each paying a minimum of £250,000 to have their brands integrated into the storylines of the 45 four-minute episodes. Hardly an earth-shattering advertising breakthrough, but KateModern was nominated in the Bafta TV Craft Awards, and Bebo's latest online soap, Sophia's Diary, currently gets 400,000 views per episode. That's a lot of teenagers needing mobile phones, Tampax and toothpaste and who can be reached without the Ofcom strictures that govern television.

'That was unique,' Shields says proudly. 'But we also did something called engagement marketing, where we work with brands and advertisers and help them connect with the audience virally through the network. So that's just understanding how people interact with Bebo and knowing when is the right time to deliver an ad, in what environment and in what context.'

This is where AOL's contextual ad technology slots in. 'I think it's a terrific fit,' says Shields. 'We want to grow the audience, we want to create the environment where people share, connect and interact with each other online. And the more time and engagement people have, the more opportunity there is to deliver them not only advertising but also media they want to see.'

By commissioning original shows for the website, Shields is boldly stepping on the toes of traditional broadcasters. What does a social-networking upstart know about making broadcast drama? Can't broadcasters stick to making shows while websites sites stick to blogs?

Shields doesn't see it that way. 'I really feel that popular culture and lifestyle are what the internet is about.' According to her, Bebo is in the 'culture' business and can't be parcelled up and kept separate from other media. Hers is an inclusive world, where broadcasters and social-networking sites work together. Bebo's Open Media policy puts this idea into practice by inviting broadcasters (including the BBC, Channel 4 and CBS) to make video clips available on the site. They get to use their own technology to show ads around their clips and keep 100% of the revenue. 'This (social networking) is the greatest thing that ever happened to all of us, whether you're an advertiser, a media company, a writer, a creator, a producer,' says Shields.

Teenagers might choose to spend their online time right now with Bebo, but they are notoriously fickle. What's stopping Bebo becoming the next has-been? 'Bebo is a youth brand,' admits Shields, 'but we believe there is an opportunity for other evolutions of the network, for other demographics. People my age might want to have the same tools available to them to express themselves and to communicate and to share, but not want to do that in an environment of 15-year-olds ... We'll definitely move upwards, but it might be called something other than Bebo.' Bobo perhaps - Blog Older, Blog Often?

If Shields had her way, we'd all be logging on daily to the Brave New Bebo World - an open, friendly and communicative universe. But there is also a darker side to social networking that can't be ignored: this concerns personal security and privacy. The week before we meet, the Daily Mail's front-page headline ran: 'Millions of Girls "At Risk" Online: Shock report reveals parents are blind to dangers of Facebook, MySpace and Bebo.' An Ofcom report last month warned parents that children can be at great risk from paedophiles and bullies when they join such sites, and that more than a quarter of children aged eight to 11 bypass online age restrictions to post up their personal details. It's a serious worry.

What is Shields' defence? 'We encourage people to keep their profiles private and to invite only their real friends.' She places the onus on parents to know what their child is doing online. 'I have my own son, he's eight, he's on his laptop all the time; you know, we have to have that trust. I look at his search history - I admit it. But he's not doing things wrong because he's a good kid. Kids are going to explore and they are going to find things, but it's up to the parent to keep that child on the right track in life.'

Hmm. All well and good if you know how social-networking sites work, and if you can keep your eyes superglued to your child. Bebo says it has been involved in industry-wide talks about improving online security and privacy, and that it has taken an active role to educate children, teachers and parents. 'This is serious,' reiterates Shields. 'When they are uploading things we ask them if they are sure they want to invite this friend. We have "report abuse" on every page.'

Actually, Computing Which? magazine named Bebo the safest and most user-friendly social-networking site earlier this year.

Such open networks create dark associations of other kinds, too. Bebo was the site that linked all the Bridgend suicides in Wales and the fear was that the teenagers were taking their own lives partly to have tributes paid to them on memorial sites on the website.

When you're working at the white-hot edge of technology, you can't help worrying about the big questions. Running and evolving a social-networking site is not like running a widget factory. You get to define how ordinary people use the web. When you stop to philosophise, you realise what a heavy responsibility you shoulder.

Shields is mindful of this. 'What drew me to the internet was that at some point the potential to communicate, for people to express themselves, to be true to themselves, and to have that ability to connect and understand each other, could really make the world a place that has more understanding and that we all might get past a lot of the things and biases that hold us back.'

Is she an idealist? 'Oh yeah - and it doesn't wane. I cannot lose it, it's just me. You know, I'm an eternal optimist.'

Shields was born and raised in a faded industrial town in Pennsylvania, the second of five children. Her father was a metallurgist who started up his own factory, her mother a housewife. She grew up in the '60s. The US was in recession. 'It was a really tough time,' she says.

There's clearly an entrepreneurial streak in the Shields family - her siblings work for themselves: a factory, a lumber company and graphic design. And politics was a kitchen-table staple, an interest that Shields carries to this day. She is currently working with Elisabeth Murdoch ('She's amazing,' says Shields) on a fundraising campaign for Barack Obama. 'I'm optimistic for the first time in a long time,' she reflects. 'It's just been a heartbreaking time to see what's happened to our country over the past eight years ... But I'm always hopeful. I'm American and proud of that and I think good sense will prevail.'

She always thought she'd go into politics or government. Her first job, at Deloitte in 1984, working in its national affairs office in Washington DC, gave her a taste of life near the West Wing, but it was the business side of her job that wooed her. One of the Deloitte partners put her to work on a business plan for National Digital, which digitised photos and sent them to news bureaux in real time. The partner became CEO and took Shields with him as marketing manager in 1987. She was bitten by the tech bug. She stayed for a couple of years and then, in 1989, following her instincts, moved to Silicon Valley, joining a start-up called Electronics for Imaging, run by dot.com entrepreneur Efraim Arazi.

How did she get the job? 'Well, I saw him give a presentation and I went up to him afterwards and said: "You don't know me but you need me! Hoo! Ha! Ha!" Like an idiot.' He hired her.

She started as a programme manager but 'pushed her way' into sales, eventually becoming worldwide VP. 'I much more consider myself to be a marketing strategist, but it is always the revenue that matters. And I think you're not a good executive unless you've had a job on the line to meet revenue targets.'

So does she thrive on pressure? 'Let me tell you a funny thing about me,' she laughs. 'Saturday mornings are my worst times because I don't know what to do with myself. I freak out on Saturdays.' She bursts out laughing again. 'I just don't know what to do when I'm not super-busy.'

In 1997, after Electronics for Imaging, Shields moved to become CEO of another San Francisco software start-up called Veon, before being offered a job in London by one of its potential buyers, Real Networks, in 2000.

It's an interesting point in her career where several important strands collide: the birth of her son, the dot.com bust, and her move to the other side of the world. 'We (Veon) saw that the downturn was coming. We were wise enough to start looking for a buyer.' The company was sold to Philips. 'It wasn't a huge financial success but it was a success in a time when everyone was having Armageddon,' she says. 'I left the Valley just in time. And then George Bush was elected, so I called myself both a digital and political refugee. I was like, phew! Just safe and sound in London. I've been here seven and a half years. I love it.' So much so she is going for British citizenship.

Though Shields is quick to talk about her son (she's clearly besotted with him), she is tight-lipped about her marriage to an Israeli photographer and web designer and their subsequent divorce. 'I was far away from friends and family and I found myself in this situation and you just have to make it work. His father lives abroad. He does see him - but day to day, it's me. At the time, I couldn't go back home, the economy was crashing, so you just have to make it work. I had a great opportunity here with Real Networks and I just had a different life to other people.

'I did some crazy things. I travelled on trips with him (her son) and the nanny and didn't tell anybody and just brought him along.' He still travels with her - they were both in San Francisco the week before our meeting. He took his laptop and played around with programmers - 'They love him. I just break the rules,' she smiles.

She manages her work/life balance by making sure she's there for him the whole weekend. 'He's my whole world ... I give him a lot of quality time. For many years, I didn't go anywhere except work and to be with him.' Certainly, being the boss also made things easier.

Is there a Mr Shields on the horizon? 'I have a partner,' she says shyly. 'I'm very happy. He's not in the industry, he's from a totally different world. What's interesting is that my life is busy and he is at the top of his career, and he travels a lot and I travel a lot, but it works beautifully.'

Being a senior woman in technology presents its own challenges, which Shields clearly takes in her stride. 'I'm a dichotomy,' she reflects. 'People would never have predicted me to do what I do. I've never been anything other than myself. I've never followed the advice of people to be more masculine or firm.'

She turns not to Bill Gates, Steve Jobs or Sergey Brin for career advice (although she probably has their numbers on speed dial) but to her father, whom she admits calling almost every day. 'I still call my dad at my age. But you know, he was a pioneer and the best business advice I've ever received is also good life advice ... My father always said your career is long and the business world is small, so you are going to meet these people again and again. I mean, you can't be 46 years old and have offended people along the way and still be successful. It just doesn't work.'

It is advice she has been careful to follow. She is regarded as a skilled dealmaker and a brilliant networker. Those who know her say that she has probably met every senior UK-based media executive. From contacts come deals, and in her time at Google she shone in this respect. She was responsible for its ad syndication network, which brought in 45% of Google's revenue. 'I was responsible for all partnerships across Europe, Russia, Middle East and Africa,' she explains. 'So, all the products that were not sold directly by Google itself. It was a big job, a really interesting role. We were the team of dealmakers.

'I love it but I have this philosophy. Every deal should have a balance. Imbalance is what creates the tension in the future, and when you're trying to create a partnership that is long term and sustaining you can't take the last dollar or pound from the table. You have to have fairness. In the long run, it serves a purpose because people feel they got the value. Then they are loyal and they feel good and they continue to work with you.'

What's next? 'I want to see this through. I'm going to stay on as president, I'm going to lead this new thing - whatever we call it - and I'm going to play a major role in the next stage of the company.' She wants Bebo and what we'll call Bobo to be a place 'where people find entertainment, friendship, relationships - and express themselves and tell the world who they are'.

Meanwhile, back in her lair, Shields prepares for her photo shoot. The washing machine has stopped, her nails are done and the makeup and lipstick in place. Lights, camera, action.

FOUR CHALLENGES FACING SHIELDS
1. To make AOL's acquisition of Bebo work
2. To monetise Bebo's users without antagonising them
3. To ensure Bebo doesn't quickly become yesterday's news
4. To learn how to relax on a Saturday morning

SHIELDS IN A MINUTE
1962: Born 12 July, Pennsylvania. Educated at Pennsylvania State
University, and George Washington University, Washington DC
1984: Deloitte national affairs office, Washington
1987: Marketing manager for National Digital
1989: Product manager and later head of worldwide sales at Electronics
for Imaging
1997: CEO of start-up media company, Veon
2000: VP international for internet media technology company Real
Networks, London
2004: MD for Google EMEA
2007: President, Bebo.

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