AOL Buying Bebo For $850 Million

imageimage In a major and rather unexpected deal, AOL (NYSE: TWX) is buying social net Bebo for $850 million in cash. Rumors had swirled around Bebo of either an acquisition or new financing for weeks, but few anticipated AOL as the suitor. AOL will get Bebo’s 40 million members and 80 million unique users, its core 13-to-24 demographic and a growing line in both original TV production and hosting broadcasters’ content. This comes as AOL completes its transition from an access business to an ad-funded content and community player.

Bebo president Joanna Shields, who has grown to effectively run Bebo from London since she was hired from Google (NSDQ: GOOG) in January ’07, “will continue to run Bebo and will report to Ron Grant”, the announcement says. But there’s no mention of site founders Michael or Xochi Birch, who are based in what is technically Bebo’s headquarters in San Francisco. Shields is not in the UK today and will be on a joint AOL-Bebo call at 9am EST.

AOL CEO Randy Falco: “Bebo is the perfect complement to AOL