Bebo has been boughto

Bebo, the social networking website beloved of UK school students, has been bought by AOL

AOL, the struggling internet portal owned by the media giant Time Warner, said today that it had bought Bebo, the young social networking site with a global audience of 7.1 million people, for $850 million in cash.

The acquisition also delivers a huge windfall - understood to be just over $700 million - to Bebo’s founders, British man Michael Birch, 37 and his Californian wife Xochi, who set the site up 3 years ago.

A great example to use in any lesson on business strategy. What drives AOL to do a deal like this? How might they make the deal work. Will they mess it up, like ITV did with Friends Reunited?

Lots of coverage in the online newspapers this afternoon as news broke:

The Times

Guardian

Telegraph

FT