AOL to acquire social network Bebo for $850 million

AOL has entered into an agreement to acquire social media site Bebo for $850 million to be paid in cash. Bebo has a strong presence in countries such as the UK, the US, Ireland and New Zealand. Bebo was started by Michael and Xochi Birch and has a total of 22.4 million unique visitors all over the world and 40 million registered users, as per comScore data for January 2008.

With the acquisition, AOL will add a social network to its product portfolio, which did not have a strong social media site so far. AOL has ICQ and AIM as its instant messaging services and Yedda.com, a question-and-answer community. AOL’s AIM Pages service helps users conduct various interactive activities other than chatting, such as sharing slideshows, videos and polls.

According to comScore, for the month of January, from the 22.4 million visitors drawn to Bebo, about 60 per cent (13.3 million) came from Europe, while about 22 per cent (about 4.8 million) were from North America, and 16 per cent (3.5 million) from the Asia Pacific. The data shows that members spent more than three hours on an average on the site.

“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,” Randy Falco, chairman and chief executive officer, AOL, said in a statement,

Joannna Shields, president, Bebo, says, “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.”