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AOL snaps up Bebo for $850m
Playing catch-up in the advertising game...

By Caroline McCarthy

Published: Thursday 13 March 2008

In an unexpected move, AOL has acquired social-networking site Bebo. The price tag: $850m in cash.

AOL said buying Bebo is a move geared toward international growth, as the youth-oriented social network is wildly popular in the UK, Ireland and New Zealand. AOL reported that it has launched "17 international websites over the last year and has plans to expand to 30 countries outside the US by the end of 2008", as well as international versions of its home page and some services.

Bebo, meanwhile, plans to launch five localised versions of its service this year (France, Germany, Italy, Spain and the Netherlands) and AOL will make it a major part of the company's international expansion strategy.

AOL chairman and CEO Randy Falco said in a statement: "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...This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers."

The Bebo acquisition comes at a time when AOL is still struggling to make the transition to a leader in online advertising after amassing nearly $1bn in acquisitions - Tacoda, Buy.at, Quigo, and AdTech, to name a few - into its Platform-A ad network, as well as social-media buys like Goowy.

In a conference call on Thursday, Falco and Ron Grant, AOL's president and COO, as well as Bebo president Joanna Shields, said that integration between Bebo and AOL's AIM and ICQ messaging properties will be crucial.

Combined, they said, AOL will own a 'social graph' of 80 million people, bigger than the 67 million that the independently run Facebook currently counts but still significantly smaller than News Corp.'s MySpace.com.

Original article: AOL buys social network Bebo for $850 million from CNET News.com