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AOL will buy Bebo, a social-networking site popular in the U.K., for US$850 million in cash, the companies said Thursday.
AOL, which is owned by Time Warner, said it sees opportunities to make money from advertising on Bebo, which has about 80 million unique users worldwide.
AOL is the latest of the major online players to grab a piece of the social networking pie. Microsoft is working with Facebook to deliver advertisements, and media giant News Corp. owns MySpace, the widest-used social-networking site.
The acquisition comes as AOL has undertaken steps to revamp its business model from being an ISP to a media and content company. It has been speculated AOL would be sold by Time Warner, and the company has struggled to reinvent itself.
AOL said it will integrate its online advertising technology, called Platform A, with Bebo. Platform A cobbles together innovations from several other AOL acquisitions, including Tacoda and Third Screen Media, intended to fill out its ability to deliver Web-based and mobile ads.
In the U.S., Bebo ranks third behind MySpace and Facebook, but is first in New Zealand and Ireland and is widely used in the U.K., AOL said.
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