AOL inks deal to buy social-networking website Bebo

NEW YORK (AFP) -
America Online, the Internet arm of media giant Time Warner, said Thursday it was buying Bebo for 850 million dollars to stake a premier position in the flourishing social-networking arena.

AOL's acquisition of Bebo, a leading social networking website in Britain and top ranked in New Zealand and Ireland, appears to all but eliminate the possibility AOL will rescue Yahoo from a hostile takeover bid by Microsoft.

Yahoo had reportedly been courting AOL as a "white knight" to rescue it from Microsoft's quest to acquire the California firm in a stock and cash deal originally valued at 44.6 billion dollars.

AOL is counting on Bebo to help it regain the prestige it held in the pioneering days of the Internet.

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

AOL was attracted by Bebo's roster of more than 40 million members worldwide and its rapid growth, according to Falco.

"This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers," Falco said of the potential to generate ad revenue from Bebo's members.

Bebo bills itself as a social media network that lets community members create and share video, music, written works and other digitized content.

Bebo describes its users as "heavily engaged," viewing an average of 78 online pages daily. Bebo has 100 employees in Britain and the United States.

"AOL has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks," said Bebo president Joanna Shields.

"With one and the same vision in this area, it was a natural progression for Bebo to join AOL."

The deal comes a week after AOL opened its platform so outside software developers could customize fun or functional applications.

AOL also recently made a version of its AIM messaging service available for Apple's hot iPhones, which combine Internet, music, video, and mobile telephone capabilities.

Advertising at social-networking websites is expected to surge 75 percent to 2.1 billion dollars this year, and climb to 4.1 billion dollars annually worldwide by 2011, according to industry tracker eMarketer.

AOL says it launched 17 international websites in the past year and plans to expand to 30 countries outside the United States by the end of 2008.

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