Media giant AOL grabs networking site Bebo for $850 million

19 May 2008

Global internet services and media company AOL Times Warner announced today that it has entered into an agreement to acquire Bebo, a leading global social media network for $850 million in cash.

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. Only recently, Microsoft has expressed interest in acquiring social networking site Facebook to increase its presence in the online space. (See: Microsoft looks at Facebook after losing Yahoo!)

This deal may be a blow to Yahoo!, which had an existing deal to sell display advertisements on Bebo. Now, in all likelihood, the contract will not be renewed. That would leave Yahoo without an advertising relationship with a major social networking network, unlike rivals Google and Microsoft who have tie-ups with MySpace and Facebook respectively.

With a membership of 40 million, Bebo may be well behind MySpace's 110 million and Facebook's 100 million users, but it has a considerable presence and a loyal following in the websphere. It 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 US. 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, Texas.

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.

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