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AOL acquires online social network Bebo |
 To expand the reach of its advertising, AOL has acquired online social network Bebo for approximately $850m.
According to AOL, Bebo has a total membership of more than 40 million worldwide and is ranked number one in Ireland and New Zealand, and number three in the US in terms of engagement. The company expects that Bebo could complement its AIM and ICQ personal communications networks and increase its user base to 80 million.
The deal shows how internet companies like AOL recognize that social networks are becoming a more significant way to engage consumers. In October, Microsoft paid $240m for a 1.6% stake in Facebook.
The deal comes just one week after AOL's launch of Open AIM 2.0, an initiative that allows the developer community greater freedom to access the AIM network and integrate AIM into its sites and applications, and the announcement by Apple of a downloadable AIM application for the iPhone.
"What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web, and the monetization opportunities that leverage Platform-A across our combined global audience. This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers," said Randy Falco, Chairman and chief executive at AOL
After the acquisition, current president Joanna Shields will continue to run Bebo and will report to AOL's president and COO Ron Grant.
As part of its international growth plans, AOL has launched 17 international web sites over the last year and has plans to expand to 30 countries outside the US by the end of 2008. In addition, AOL teamed up with HP in September 2007 to include localized versions of the AOL.com portal and other AOL services as the default setting on HP computers shipped in the US and around the world. Bebo, which has announced plans to launch in five countries this year, will be featured prominently in AOL's international expansion efforts after the deal is closed.
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