"What drew us to Bebo was its substantial and fast-growing worldwide user-base, its vision of a truly social web and the monetization opportunities," said AOL chairman and CEO Randy Falco yesterday as he announced the acquisition by AOL of the social networking site Bebo.com for $850M. "This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers," he continued.

Under the terms of the agreement, AOL will acquire Bebo for $850 million in cash.

"AOL understands the shifting dynamics of the Web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks," said Bebo President, Joanna Shields. "With one and the same vision in this area, it was a natural progression for Bebo to join AOL, and we look forward to working together to continue to expand the online social experience globally."

Shields will continue to run Bebo upon closing the transaction, and will report to AOL's Ron Grant.

Since its inception, Bebo - now with a total membership of more than 40 million worldwide - has established a radical new vision for online media and engagement marketing, combining community, self-expression and entertainment, enabling its members to consume, create, discover, curate and share digital content in entirely new ways. Bebo global users have high engagement levels spending an average of 33 minutes a day on the site. Its groundbreaking Open Media platform ushered in a new way for Bebo users to experience content online, while giving global media companies like MTV, CBS, BBC and more than 400 others, a new way to promote, distribute and monetize their programming. "Engagement Marketing," is Bebo's initiative for brands to build long-term relationships with their target audience. Today, brands from Apple to Nike use Bebo as a platform to establish ongoing conversations with consumers.

Bebo pioneered the blending of Web-native original content with interactivity in the social networking environment by co-producing "KateModern," the most successful TV show on the Web, now in its second season, followed by the soon to be premiered "Sophia's Diary," and the upcoming "Gap Year." In December 2007, Bebo opened its platform to external application developers becoming the first social network to embrace both Facebook and OpenSocial APIs. To date, more than 1500 applications have joined the network.