AOL Buys Bebo for $850 Million

The image “” cannot be displayed, because it contains errors.From the release that went out this a.m.:

AOL announced today that it has entered into an agreement to acquire Bebo (, a leading global social media network. Together with its AIM and ICQ personal communications network, the acquisition will give AOL a premier position in the fast growing world of social media with a network of approximately 80 million unique users.

With a total membership of more than 40 million worldwide, Bebo is a global social media network which combines community, self-expression and entertainment to enable its users to consume, create, discover and share content. Bebo is one of the leading social networks in the UK, and is ranked number one in Ireland and New Zealand, and number three in the U.S. Its users are heavily engaged and view an average of 78 pages per usage day. Bebo has approximately 100 employees operating in offices in the UK, San Francisco and Austin, TX.

The deal comes just one week after AOL’s launch of Open AIM 2.0, an initiative that allows the developer community greater freedom to access the AIM network and integrate AIM into its sites and applications, and the announcement by Apple of a downloadable AIM application for the iPhone.

Under the terms of the agreement, AOL will acquire Bebo for $850 million in cash.

Given all the discussion about AOL spinning off and being under such pressure this is somewhat unexpected. Yahoo! has a relationship with Bebo to provide ads and search and so it, in my view, was the more likely acquiror. However, this continues a string of big acquisitions by AOL and presumably provides a huge ad distribution opportunity for the company.

It will be very interesting to see whether anything happens now between AOL and Yahoo. More to come.

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