AOL to acquire Bebo

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AOL continues to invest in social media
AOL continues to invest in social media

AOL is keeping up its acquisition momentum, as it has entered into an agreement to acquire social networking site Bebo.

The acquisition of Bebo, a social network with 40 million users, will grow the online giant's threshold into the social networking realm. Combined with its other social properties AIM and ICQ, the acquisition of Bebo will expand AOL's social network to approximately 80 million unique users worldwide.

In a statement, Randy Falco, CEO of AOL, said that Bebo is "the perfect complement to AOL's personal communications network and puts us in a leading position in social media."

According to Hitwise, Bebo ranked 4th among a custom category of 55 social networks, after MySpace, Facebook and MyYearbook for Februay 2008 receiving 1.15% of all US visits to social networks.

"MySpace already has NewsCorp. and Facebook already has an investment from Microsoft, so it makes sense for AOL to add a social network to their portfolio, it is a category that media firms are looking to get into because consumers are spending a lot of time on these sites," said Heather Dougherty, director of research at Hitwise.

The planned acquisition comes a few weeks after Time Warner announced that it plans to split AOL into two separate divisions. Reportedly, one division would focus on Internet access and the other on online services and advertising.

The acquisition also comes on the heels of a series of acquisitions in the advertising business for AOL, which have facilitated the growth of the Platform A network. Platform A, which contains AOL's property Advertising.com, is made up of a network of firms that offer a variety of marketing services including targeting, Web analytics and online display ad models.

Acquisitions include contextual advertising firm Quigo, behavioral targeting firm Tacoda, mobile ad network Third Screen Media and ad serving network AdTech AG. Each of these companies was acquired last year.

Other acquisitions include video advertising platform Lightningcast in 2006, and affiliate ad network and e-commerce services firm Buy.at, a property that AOL acquired last week.

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