AOL To Buy Bebo For $850m

AOL is to buy leading social networking website Bebo in an $850 million (£417 million) cash deal.

Bebo, founded by Michael and Xochi Birch in 2005, claims to have 11.4 million unique users in the UK and a worldwide membership of more than 40 million.

In a statement released this afternoon, AOL said that the deal would give it a network of approximately 80 million unique users.

Randy Falco, chairman and CEO, AOL, said: “Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media.

“What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web, and the monetisation 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.”

Bebo president, Joanna Shields, said: “AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks.

“With one and the same vision in this area, it was a natural progression for Bebo to join AOL, and we look forward to working together to continue to expand the online social experience globally.”

The deal will see Shields continue to run Bebo, although she will now report to Ron Grant, president and COO of AOL.

AOL’s social media business currently includes the online messaging service AIM and the personal communications network ICQ.

ITV recently signed a deal with Bebo which will giving the website’s global users access to premium ITV content (see ITV Signs Video Deal With Bebo).

AOL: 01268 530919 www.aol.co.uk