Silicon Alley Insider Henry Blodget reflects on AOL's $850 million acquisition of Bebo, saying, "We don't get it." The companies' clearly believe their strengths will complement one another: Bebo is strong internationally, but it's a distant fourth in the U.S. social networking market. AOL is much stronger in the U.S. than it is in Europe. Blodget says the bigger problem here is that "the companies' strengths aren't that strong." In the Web portal business, its main business, AOL is a distant third to Yahoo and MSN. Bebo, meanwhile, isn't even the No. 1 social network in the U.K., …

All eyes are on AOL these days. The Time Warner company is supposedly on the block, which made yesterday's $850 million acquisition of Bebo seem all the stranger, but AOL is also after widget maker KickApps, for a reported price of $90 million. KickApps makes "white-label" widgets for companies and helps monetize them. The Web software maker has raised $17 million in two rounds of venture capital financing, the most recent being August 2007. TechCrunch (link: http://www.techcrunch.com/2008/03/14/aol-on-a-bender-kickapps-may-be-next-acquisition/) asks the pertinent question: Does KickApps fit within AOL's overall widget/socialnetwork/advertising strategy? After paying $850 million for Bebo, AOL is …

If the future is about the portability of ads and content, then the widget business is a very good place to be. KickApps chairman Eric Alterman says portability could one day be so commonplace that "every consumer facing Web site will be a collection of widgets." Alterman, speaking at the McGraw Hill Companies' Media Summit in New York, predicted that ad networks would also simply become a collection of widgets, or portable Web-based software programs. He even went so far as to say that, "all the money on the Internet will be in that space...and traditional media will …

It's the Microsoft-Yahoo battle of the video game industry. Electronic Arts took its proposed $2 billion takeover of Take Two Interactive directly to shareholders. Most analysts were baffled by Take Two's decision to reject the generous offer, which values the Grand Theft Auto maker's shares at a 50 percent premium over its Feb 22nd closing price of $17.13. Take Two CEO Strauss Zelnick is now saying that EA should wait until after the release of Grand Theft Auto IV, which analysts predict will be the year's biggest seller with sales of more than 10 million copies. …

YouTube is transforming from a destination to an application, after Google released a set of tools earlier this week that would let developers create fully functional YouTube players on their own Web sites. These new tools allow them to search YouTube's entire library, rate videos, post comments and even upload clips to the video sharing site's servers. The deal means generous access to YouTube's user base for Web developers. "We provide open access to our sizable global audience, enabling you to generate traffic for your site, visibility for your brand or support for your cause," the company says …