BEBO, the online hangout, is the sixth dot-com business that Michael and Xochi Birch have set up. Yet, if it had not been for the other five, Bebo would not have been the talked-about phenomenon it has become.

Bebo, only just over a year old, already attracts 3.5 billion page views a month, and people spend an hour on the site at a time. Already profitable, its biggest market is the UK, where it is ahead of MySpace — sold to News Corporation, parent company of The Times, for $580 million (£304 million) last year — and it is No 3 in the US.

The husband and wife team — he is chief executive while she “does finance and HR” — met as programmers for an insurance company, became bored, and were tempted by the dot-com boom. They interview as a duo, finishing each other’s sentences, although Michael is the talker and ideas man.

With little money other than the proceeds from remortgaging their flat in Richmond, their first ideas relied on “viral growth” because they could not afford the marketing costs.

There was Lemonlink, an address book, and Babysittingcircle.co.uk, both of which failed. Friendlywills was next, which Michael says “was my brother’s idea, but I hated the subject area”.

Their luck began to turn with Birthdayalarm, which reminds people about birth dates, and sells gifts. It has 45 million registered members and makes a modest profit on gifts and upmarket e-cards, and the couple still own it for its income.

Next was Ringo, the forerunner to Bebo. Michael saw Friendster, the first networking website, and copied the idea over the next 13 days. The simple notion of posting about yourself, and creating networks with friends, he reckoned was “addictive, and could evolve into so much more”.

Ringo emerged in 2003, by which time the pair had moved to San Francisco in Xochi’s native California. It attracted 400,000 members in three months. “We were still struggling financially, and suddenly we got three offers in a week.” Ringo was sold to tickle.com “for a few million”.

Michael admits that they had “seller’s remorse” and despite an 18-month non-compete agreement, plotted another social networking site, realising they were on to something. Bebo was born in July last year, and for the first time the couple took $15 million in venture capital money to help. “We did that for the credibility it brought, not the money,” Xochi says.

Bebo — the name was short snappy, meaningless and available — works by organising members, who pay nothing, into communities. Although it is not designed to be a teenage site, typical Beboers are in their late teens, but Michael says that the “age range is going up”. People decide how much they want to share, but Bebo helps people group around schools and colleges.

The plan is to keep expanding to reach new audiences: when Bebo started pushing a music community in June “10,000 bands registered in just three days, and we seem to have gelled with hip hop”. Most bands are unsigned, but Coldplay have a site, with pictures of 2,393 groupies.

Michael wants to build an authors section — and organise people around bars and clubs “so you can see what people look like when they are sober” — arguing that a networking website is not just about spending all your time online, but helping people to meet.

The worry, though, is the amount of personal information teenagers seem willing to share with the world, creating fears that Bebo could be used for grooming. Bebo, which has a minimum age of 13, has hired a child-protection specialist.

“I think this is something that the media has blown out of all proportion, but that has not necessarily been a bad thing because it has raised awareness,” Michael says, and advises that what matters is that parents and children have a dialogue — if that’s possible — about what is posted online.

The business has taken off too, with revenues up between 10 and 20 per cent in each of the past three months. Membership “will always be free”, with money made on advertising — and a valuation of $1 billion has been bandied about, with Viacom touted as a likely buyer.

“We’re not looking to sell,” Michael says, although Xochi adds that “it wouldn’t be bad” if they got rich from a windfall. But Michael wants to be closely involved — he programs when he can. He said: “I’m not planning an exit, but I doubt we will hand it down to the kids, even though my seven-year-old daughter has said she wants to work at Bebo.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive