NEW YORK (AdAge.com) -- AOL may finally be shedding its faltering social-networking site Bebo, according to news reports. Private investment firm Criterion Capital Partners is said to be the buyer. The terms of the sale have not been disclosed.
The New York-based AOL bought Bebo in 2008 for $850 million in cash under a deal inked by then CEO Randy Falco. Current CEO Tim Armstrong has stated in recent months that the company has been looking to sell the social network, or dissolve it altogether. Bebo CEO Joanna Shields resigned in May of last year, a few months after Mr. Armstrong came on board. Ms. Shields is currently VP-international sales for Facebook.
Bebo has struggled to keep pace with rivals Facebook and MySpace, drawing in only 12 million people worldwide in April, according to ComScore, which represents a 53% decline from last year. MySpace's audience also declined 12% to 111 million people. Facebook now dominates the sector with over 519 million people visiting in April, a 69% increase for the same period.
Bebo has been largely ignored by AOL, which is in the process of remaking itself into an ad-supported content site. The ailing portal, which reported a 23% decline in total revenue in the first quarter, now features original news and commentary, locally derived news and information via Patch, and Seed, a low-cost search specialist like Associated Content, which was recently bought by rival portal Yahoo.
The company's unloading of Bebo speaks to Mr. Armstrong's aims to transform AOL into a premium content player, further highlighting the incompatibility between social sites and content sites. AOL sold its instant-messaging service ICQ for $187.5 million in cash to Russian investment firm Digital Sky Technologies in April.
A spokesperson for AOL would not comment.