AOL Eats Bebo and Seems Hungry for More

As everyone knows by now, AOL will purchase international social media/network Bebo for $850 million. But no one seems to agree on whether this was a smart move, let alone a smart price. Yes, it gives AOL’s large ad business a great deal more inventory. But Google complains that its ad deal with MySpace has been tough to monetize, in part because people engaged in social networking do not like clicking away to advertiser sites. AOL’s recent buying spree has been focused mainly on advertising technology and networks (Tacoda, Quigo, Third Screen) and so this marks a major attempt to keep its own position as a content portal relevant. CEO Randy Falco sees it as reasserting AOL’s legacy at the heart of online community. Of course, social networks are stronger on entertainment topics, and arguably this gives Time Warner a nice international promotional platform for its TV, film and print properties. Or, it makes AOL a more attractive acquisition target for someone else. Rumors persist that AOL is not done buying, however.