AOL Buys Bebo Social NetworkAOL Buys Bebo Social Network

AOL internet division is scooping up the international social networking site Bebo for $850 million.Bebo is the third-largest social networking site in the United States, behind MySpace and Facebook. The $850 price has to be considered a bargain in today's hot social-network market: Microsoft paid $240 million for just 1.6 percent of Facebook last year; and News Corp, which paid $580 million for MySpace three years ago, now values that property at more than $15 billion.

Bebo fits into AOL's current advertising-oriented growth plans, as social networks are considered prime locations for targeted online ads. The acquisition is also a way for the Time Warner subsidiary to broaden its international reach: Bebo is very popular among the desirable 13-24 age group in the U.K., Ireland, and New Zealand. AOL has announced plans to expand to 30 countries outside the U.S. by the end of 2008, while Bebo will spread to France, Germany, Italy, Spain, and the Netherlands.

?This is a tremendous acquisition and one I think is game-changing for AOL?it puts us squarely as a leader in social media,? AOL chairman and CEO Randy Falco said. ?Bebo will be the cornerstone of our strategy to transform the online experience for advertisers, media companies and consumers. Bebo is the best social media asset out there.BBC News, CNET News