Bebo spared the axe after AOL finds American buyer

SOCIAL networking site Bebo was saved from closure yesterday after its parent company, AOL, sold it to a United States firm two years after buying it for £574 million.

The deal with Criterion Capital comes two months after AOL said it was unwilling to put up the "significant investment" needed in Bebo, which was threatened with the axe unless a buyer was found.

Bebo was a success in the UK, but flopped in the US against competition from Facebook. AOL is likely to have sold it for a fraction of the purchase price.

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Tim Armstrong, chief executive of AOL, said: "The deal will allow Bebo's users to remain within the social platform that they know and love, while enabling a new owner to bring new possibilities and experiences to bear."

San Francisco-based Bebo was launched in 2005 and the sale to AOL – then part of Time Warner – netted a big windfall for Michael and Xochi Birch, who reportedly owned about 70 per cent of the firm at the time of the takeover. Last April, Bebo had 12.6 million users, but the 4.4 million British ones were responsible for generating well over half of the site's 1.9 billion monthly page impressions.

Adam Levin, Criterion's managing partner, said Bebo was "an attractive media platform, both as a standalone entity and in the context of our broader investment objectives."