Reports are that AOL, having bought social-networking company Bebo for $850 million two years ago, has agreed to sell it for $10 million. Oops.

While we didn’t write anything at the time of the purchase–we were in the throes of finishing the writing of “Billion-Dollar Lessons”–we’ll go ahead and comment now because one of the main mistakes that AOL made seems like it’s being repeated by many others.

FINALLY, SOMEONE ADMITS A MISTAKE

Over the years, we’ve been stunned to see how hard it is for executives to recognize and acknowledge mistakes. After all, everyone makes mistakes. The trick is to learn from them so you don’t repeat them, or, better yet, to learn from others’ errors so you never have to make those particular mistakes yourself. Despite the obvious benefits of learning from errors, the denial among executives runs so deep that, to pick a couple of examples from our book:

Rumors of Yahoo’s interest in AOL, as recently reported in Fortune, give us pause. We understand Yahoo’s proclivity to do a deal. Advertisers and investors are flocking to Google, even though Yahoo remains the top site in terms of user traffic. As a result, Yahoo’s profits have been disappointing, and its stock is down almost [...]