AOL plans to acquire social networking site Bebo for US$850 million, a move reports suggest could put to rest rumours that AOL is pursuing a deal with Yahoo! in an attempt to help Yahoo! fend off Microsoft’s acquisition efforts. Today’s announcement will put AOL into the high-profile area of social networking. Bebo is one of the largest social networks in Britain, is ranked number 1 in Ireland and New Zealand, and has a global membership of more than 40 million. In the US, however, it ranks third behind MySpace and Facebook.
Yesterday Mobile Business Briefing reported that Time Warner CEO Jeff Bewkes hinted AOL may be set to carry out some kind of transaction. He said he was open to merging AOL with another company in “whatever configuration makes it the strongest and the most valuable.” That statement immediately led to speculation AOL could strike a deal with Yahoo! as it fights off Microsoft’s US$44.6 billion acquisition offer. Earlier this week News Corp. appeared to rule itself out of a partnership with Yahoo! following comments from the media company’s Chairman Rurpert Murdoch that it does not want to “get into a fight with Microsoft.”