AOL to acquire Bebo

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New York—Signaling its entry into the social media space, AOL announced Thursday that it has agreed to acquire social media network Bebo for $850 million in cash. AOL intends to integrate Bebo with its AIM and ICQ instant messaging and communications network.

While far behind Facebook and MySpace in the U.S. in terms of users, Bebo is a leader in the U.K. and is ranked No. 1 in Ireland and New Zealand. It has 40 million members globally.

The deal comes just one week after AOL’s launch of Open AIM 2.0, an initiative that allows developers greater freedom to access the AIM network and incorporate AIM into their sites and applications. It also follows Apple’s recent announcement of a downloadable AIM application for the iPhone.

“Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media,” said Randy Falco, AOL chairman-CEO, said in a statement.

—Carol Krol

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