AOL Buys Bebo for 850 Million

Bronze medal social network (behind ever newsworthy Facebook, and MySpace) has announced that they have been taken over by AOL for a cash deal worth US$850 Million. The deal far surpasses the US$500 News Corp paid for MySpace in July 2005 – but the average price for each of their claimed 40 million users is slightly lower – US$21.25 vs. the US$25 Rupert Murdoch paid for each of MySpace’s 20 million users.

However it must be noted that their figure of 40 Million users is slightly contentious with Wikipedia listing some 20.3 million, and some of Bebo’s other claims have been questioned.

The deal is taking some heat from valley analysts. Also from Valley Wag:

In 2006, Bebo revenues were $7 million, with just $3 million in EBITDA — Wall Street’s favored measure of operating profit. Last year, total revenues climbed to $20 million, $5 million in EBITDA. So that’s a price-to-earnings ratio of 160.