AOL to Acquire Bebo

NEW YORK, March 13: AOL
has entered into an agreement to acquire the global online social-media network
Bebo for $850 million in cash.

Bebo has a total
membership of more than 40 million worldwide. It is one of the leading social
networks in the U.K., and is ranked number one in Ireland and New Zealand, and
number three in the U.S. Bebo blended original web content with interactivity
in the social-networking environment by co-producing KateModern, a TV show on the web that is 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 1,500 applications have joined
the network. The company also launched an Open Media platform that allowed Bebo
users a new way to experience content online, while giving global media
companies like MTV, CBS, the BBC and more than 400 others, a new way to
promote, distribute and monetize their programming.

Bebo has approximately 100
employees operating in offices in the U.K., San Francisco and Austin, Texas.
Upon closing the transaction, Bebo’s current president, Joanna Shields, will
continue to run Bebo and will report to Ron Grant, the president and COO of
AOL.

The deal comes just one
week after AOL's launch of Open AIM 2.0, an initiative that allows the
developer community greater freedom to access the AIM network and integrate AIM
into its sites and applications, and the announcement by Apple of a
downloadable AIM application for the iPhone.

As part of its
international growth plans, AOL has launched 17 international websites over the
last year and has plans to expand to 30 countries outside the U.S. by the end
of 2008. In addition, AOL teamed up with HP last September to include localized
versions of the AOL.com portal and other AOL services as the default setting on
HP computers shipped in the U.S. and around the world.

Bebo, which has announced
plans to launch in five countries this year, will be featured prominently in
AOL's international expansion efforts after the deal is closed.

"Bebo is the perfect
complement to AOL's personal communications network and puts us in a leading
position in social media,” said Randy Falco, the chairman and CEO of AOL.
"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
that leverage Platform-A across our combined global audience. This positions us
to offer advertisers even greater reach and marketers significant insights into
the desires and needs of consumers.”

"AOL understands the
shifting dynamics of the web and has clearly demonstrated its commitment to
leveraging the ever-increasing power of social networks,” added Bebo’s 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.”

—By Irene Lew