AOL acquired Bebo for US$850m only two years ago but made its plans for the future of the social networking site after an internal email to employees from its startup acquisition and investment unit, AOL Ventures, it would require a "significant investment" to stop it from folding.
The email said: "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."
Bebo, once the top social networking site in Ireland and the UK, has been slipping in popularity in the past few years as rival Facebook has grown rapidly. Meanwhile, the site never really took off in the US and its 5.8 million users in February 2009 has already dropped to 5.1 million a year later while Facebook has a user base of 210 million.
By Marie Boran
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