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Last Updated: Thursday, 13 March 2008, 13:31 GMT
AOL acquires Bebo social network
Screen-grab from Bebo website
Bebo has 40 million members worldwide
Time Warner's AOL internet division is buying the social networking site Bebo for $850m (417m) in cash.

Bebo is the third-biggest social networking site in the US, behind MySpace and Facebook.

AOL says that Bebo has more than 40 million members worldwide who view an average of 78 pages per day each.

The price-tag is tiny when compared with the valuations of similar websites. Microsoft bought 1.6% of Facebook last year for $240m.

Online advertising

News Corp bought MySpace for $580m in 2005 but now estimates that it is worth more than $15bn.

TOP NETWORKING SITES
MySpace
Facebook
Flickr
Hi5
Friendster
Perfspot
Orkut
Dada
Bebo
Skyrock Network
Source: ComScore

Social networking sites are seen as a valuable location for online advertising, because members post information about themselves and can then be targeted with products and services likely to appeal to them.

The transaction comes at a time when Time Warner is considering splitting its business to part company with its AOL unit.

Bebo was the world's ninth most popular social networking site in January, according to the internet statistics provider ComScore, which also ranked it as the second most visited in the UK.

It was founded in California by Michael Birch, a British entrepreneur, who still owns a big stake in the business and so will make a great deal from the sale.

Rory Cellan-Jones, BBC
While Facebook made all the media noise last year, Bebo was in some ways more innovative
BBC Technology correspondent Rory Cellan-Jones

Alex Burmaster, European Internet Analyst for Nielsen Online, said: "It comes as no great surprise to see another traditional publisher buying in to the power of the social networking phenomenon.

"Microsoft did it with Facebook, News Corp did it with MySpace so Bebo was the next logical target."

He added: "Bebo has an incredibly strong brand identity, particularly with the teenage and young adult market, so it will be very interesting to see how AOL makes best use of their new youthful Trojan horse."



VIDEO AND AUDIO NEWS
What AOL hopes to gain from the purchase



SEE ALSO
ITV2 signs online deal with Bebo
10 Mar 08 |  Entertainment
AOL 'contemplates Yahoo approach'
17 Feb 08 |  Business
Bebo denies 'up for sale' report
14 Feb 08 |  Business
Time Warner profits slide in 2007
06 Feb 08 |  Business
Children plagued by cyber bullies
18 Jan 08 |  Technology
TV clips made available on Bebo
14 Nov 07 |  Entertainment

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