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Last Updated: Thursday, 13 March 2008, 15:58 GMT
Companies buying into social networking
By Iain Mackenzie
Newsbeat technology reporter

Bebo and MySpace logos
Question: What is the quickest way to make new friends when your old ones are abandoning you?

Answer: Buy them - with a massive wad of cash.

That is what internet service provider AOL has just done.

The company is shelling out 417m to buy social networking site Bebo.

While AOL's customer base (in the US at least) has been steadily declining, Bebo has gone from a standing start to become the world's ninth most popular social network in less than three years.

So what does nearly half a billion pounds get you?

For AOL it means access to 40 million, mainly young, users. Crucially it's a way to get them looking at adverts again.

The wired in teens who use Bebo are the same people who are abandoning TV and magazines to spend their spare time online.

However, ratcheting-up the number of adverts could be counter productive.

MySpace logo reflected in a woman's eye
Rupert Murdoch's News Corp bought MySpace in 2005 for 285m
When News Corporation bought MySpace in 2005, many users complained that the site became too commercial and said they were put off using it.

There is perhaps less danger of that with Bebo as it is already pretty well stocked up with adverts, currently provided by Yahoo.

It is likely that Bebo will increasingly be used as a research tool into the habits of young users.

Information about what users are clicking on and how often is hugely valuable to businesses.

Advertisers will pay big money to learn more about the thoughts, hobbies and spending habits of next generation consumers.

So any other changes that users will notice?

It seems unlikely. Expect to see more online dramas like the hugely successful Kate Modern as well as partnerships with broadcasters including the BBC.

AOL made its name as an internet service provider. But the days when you could be just a broadband provider or just a search engine are gone.

Cast of Kate Modern
The first series of Bebo soap Kate Modern ran for 155 episodes
Now it is all about content; music, video, blogs. It is the reason why so many media firms team up with techy companies. AOL & Time Warner, Google & YouTube, Apple & just about everyone.

But there is a flip side to concentrating all that power in one place.

For the cutting edge young users who made Bebo such a success it may prove a turn off.

Mainstream social networking

Like when your parents start listening to your music, it becomes uncool.

Large corporations have shareholders to answer to. They naturally want to cater to the majority of users and mainstream tastes.

Skyrock Network
Source: ComScore
Suddenly your alternative hangout can start to look a bit stale.

Recent figures showed an eight per cent drop off in the number of people logging on to Bebo every month.

MySpace saw an even worse decline.

It is still early days, but which social network you use could turn out to be as much a fashion fad as the music you listen to and the clothes you wear.

AOL acquires Bebo social network
Thursday, 13 March 2008, 13:31 GMT |  Business
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Friday, 22 February 2008, 16:20 GMT |  Technology
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