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AOL buys UK’s favourite social network Bebo for $850 million

Rachel Hawkes (Social Media Portal) - 13 March 2008

Amid speculation that it would soon partner Yahoo!, AOL has today announced their acquisition of popular social networking site Bebo for $850 million USD.

Bringing Bebo into the fold, will give AOL a global network (which includes ICQ and AIM) of over 80 million users with Bebo contributing more than half of those.    The deal follows the launch of AIM for Apple’s iPhone and Open AIM 2.0 last week, a platform that allows developers to integrate AIM into websites and applications.

AOL’s chairman and chief executive officer Randy Falco says that by acquiring Bebo they are positioning AOL as a leader in the social media space.  He comments, “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 that leverage Platform-A across our combined global audience. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”

Over the last six months, AOL has made significant buys to the sum of $1 billion USD in the online advertising market, snapping up companies such as, Lightningcast and Third Screen Media.  These acquisitions have created AOL’s Platform-A,  an ad serving network which according to comScore has a reach of over 167 million unique visitors.

Bebo, which has 100 employees operating from its head office in London, and operating offices in San Francisco and Austin, Texas will continue to be managed by current president, Joanna Shields who will report to AOL’s chief operating officer and president Ron Grant.  Shields says the joining AOL was a natural progression for Bebo.  She continues, “AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks.”

Grant says, “Bebo’s dynamic management team recognizes that the Internet is less about destination and more about connecting people, culture and lifestyles.  This acquisition supports our key objectives – accelerating the growth, engagement and monetization of one of the world’s most engaged online communities.”

In October 2007, Bebo and AOL first announced an alliance to provide AIM to Bebo users from within the social network.  They announced a similar partnership with Microsoft’s Live Messenger two months earlier.  Last month, Bebo announced a partnership with Intercasting Corporation to allow users of the UK’s most popular social network with access to the site on their mobile phone.  

Acquisition rumours first started doing the circuit last month for a reported $1 billion USD sum, although these rumours went unsubstantiated.

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