• by John Capone , June 17, 2010

AOL Thursday acknowledged it has sold Bebo to Criterion Capital Partners. Rumors of the sale swirled Wednesday, especially after a Wall Street Journal reporter posted news of the sale to Twitter (then quickly removed the errant post).

Financial terms of the deal were not disclosed, though there has been no end to speculation about a fire sale price for AOL's beleaguered social network. After AOL announced it's intention to sell Bebo, some pundits speculated that it would be better off just shutting the service down. Whether the sale confirms or refutes these terms remains open for debate.

Bebo launched in 2005 and was acquired by AOL for $850 million in March 2008.

“Criterion Capital Partners are specialists in facilitating growth plans and turnarounds, and are well placed to drive Bebo’s effort to strengthen its foothold within the highly competitive social networking arena,” said Tim Armstrong, Chairman and Chief Executive Officer, AOL optimistically in a statement. But why shouldn't he be optimistic? The service is no longer his problem.

Adam Levin, managing partner at CCP attributed Bebo's activeness to CCP to “The young, highly active user base, revenue history, presence in countries throughout the world and solid technical infrastructure make it an attractive media platform both as a standalone entity and in the context of our broader investment objectives."

The fact remains that Bebo runs as an also-ran in a highly competitive space. It's hard to imagine AOL's stated reason for shedding the service -- it wanted to focus on being a content company -- as being realistic. A successful social network could only have aided AOL's mission.