Social networking site Bebo is was founded in 2005 by British entrepreneur Michael Birch and his wife, Xochi Birch. With a reported 40 million users, it is currently the second-largest social networking site in the UK, and the third-largest in the world.TechCrunch: AOL Buys Bebo For $850 Million (March 13, 2008)Washington Post: AOL to Buy Bebo to Compete In Social-Networking Market (March 14, 2008)

Bebo was purchased by AOL on March 13, 2008, for £417 million. Facilitated by Randy Falco this controversial acquisition was AOL's first entry into Social Networking.

On April 6th, 2010, the Silicon Alley Insider reported that AOL will either sell or shut down popular social networking website Bebo before May of 2010.http://www.businessinsider.com/aol-wants-to-sell-or-shutdown-bebo-reuters-2010-4

AOL management commented, "AOL is not in a position at this time to further fund and support Bebo". This news comes as a surprise to many as only two years ago, then CEO Randy Falco paid $850 million for the service.

The memo reported by Businessinsider.com conveys the following:http://www.businessinsider.com/aol-wants-to-sell-or-shutdown-bebo-reuters-2010-4#ixzz0kLnw2VG3

"The strategy we set in May 2009 leverages our core strengths and scale in quality content, premium advertising and consumer applications, positioning us for the next phase of growth of the Internet. As we evaluate our portfolio of brands against our strategy, it is clear that social networking is a space with heavy competition, and where scale defines success. Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space. AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking.

AOL is committed to working quickly to determine if there are any interested parties for Bebo and the company’s current expectation is to complete our strategic evaluation by the end of May 2010."