AOL to buy Bebo for $850m

Internet group AOL agreed a deal to buy social networking website Bebo for $850m (€545m) today.

The takeover is the latest in a string of multimillion-dollar deals as firms look to tap into the boom in popularity of social networking sites.

Rupert Murdoch’s News Corp bought MySpace in 2005 for $580m (€372m), while technology giant Microsoft snapped up a 1.6% stake in Facebook for $240m (€154m) late last year.

The AOL deal is set to net Bebo founders Michael and Xochi Birch a significant windfall.

The duo launched Bebo in July 2005 and have since grown the business into one of the world’s largest social networking sites, with a global membership of more than 40 million people.