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AOL completes acquisition of social network Bebo

AOL on Monday said it has completed the acquisition of Bebo, an online social network focused on the youth market and particularly strong in the United Kingdom.

Bebo will become the centerpiece of AOL's newly created People Networks business unit. Bebo chief executive Joanna Shields will serve as president of the new unit and report to Ron Grant, AOL's president and chief operating officer.

"With the addition of Bebo and the creation of People Networks, AOL is uniquely positioned to capitalize on the exploding social media space by delivering a more personal experience for consumers and a better way for advertisers to engage them," Randy Falco, chairman and chief executive of AOL, said in a statement.

The Bebo acquisition gives AOL the third piece of a three-prong strategy focusing on advertising, publishing, and social networks. "Unlike other social networks, which have had a difficult time monetizing their sites without jeopardising the user experience, Bebo created an environment that enables advertisers, brands, and media companies to engage in meaningful, relevant conversations with its users," Grant said.

Among the first tasks with Bebo will be to integrate it with AOL's instant messaging, chat, and e-mail platforms, the company said. AOL also plans to let Bebo users merge their profiles with AOL instant messaging, so they can use common screen names without re-registering. AIM had 30 million users worldwide, and ICQ, another AOL IM service, has 28 million, according to AOL.

Other recent acquisitions that will be integrated into AOL's People Networks services are Goowy Media, which makes widget technology, and Yedda, a social search company.

AOL plans to promote Bebo's original programming, such as "KateModern," "Sofia's Diary" and "The Gap Year," across several AOL channels. Bebo, on the other hand, will use AOL music and entertainment content. Display ads will be a key advertising medium on Bebo, which has been successful in integrating brand advertising in programming, according to AOL.

AOL announced plans in March to buy Bebo, which has 42 million users.

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