AOL buys Bebo for $850 million

[Marik]

This morning, AOL released information concerning the company buying social network Bebo. The reported price: $850 million. Neither company has said when the deal will close. Joanna Shields, president of Bebo, will keep her position and continue to run it. Her boss will be the president and chief operating officer of AOL, Ron Grant. "Bebo is the perfect complement to AOL's personal communications network and puts us in a leading position in social media," said AOL chairman and CEO Randy Falco, "What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web, and the monetization opportunities...This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers."

Rumors have been circulating for a few months about Bebo being for sale, with the price tag suggested as $1 billion. However, there weren't many rumors about which company would buy it. Even though AOL and Bebo had been partnered to offer friend-invites between the social netowrk and AOL's AIM instant messenger, no rumors thought of the possibility of AOL buying Bebo.

AOL states that this purchase is towards its global movement. Bebo is popular among the youth in the U.K., Ireland, and New Zealand. AOL reported that it has launched "17 international web sites over the last year and has plans to expand to 30 countries outside the U.S. by the end of 2008."

Source: WebWare