Just An Online Minute... AOL Buys Bebo, Sheds Ad Execs

AOL is hemorrhaging ad executives, but that hasn't stopped the company from agreeing to pay $850 million to acquire social networking site Bebo.

In a deal announced this morning, AOL said it has agreed to purchase the 3-year-old U.K.-based site, which claims 40 million worldwide members. Factoring in the number of people using its instant messaging services, AOL now can say its social network reaches 80 million unique users worldwide.

Whether that will help the company financially remains to be seen. So far, social networking sites have proven surprisingly difficult to monetize. Facebook CEO Mark Zuckerberg said Sunday that the company, though valued at $15 billion, was close to breaking even financially -- in other words, wasn't turning a profit.

And Google's high-profile $900 million ad deal with MySpace isn't generating the kinds of returns the companies had hoped. "I don't think we have the killer, best way to advertise and monetize social networks yet," Google co-founder Sergey Brin said in a recent earnings call.

AOL presumably intends to monetize the site with ads personalized to users based on the information on their profiles or Web-surfing activity. With its acquisition of Tacoda last year, AOL appears poised to make such a move into behavioral targeting.

At the same time, however, the ad division has been shedding executives at breakneck speeds. Monday, the company ousted Curt Viebranz, former CEO of Tacoda. That departure came shortly after two other departures: Tacoda founder David Morgan, who left his position as AOL's executive vice president, global advertising strategy, and Kathy Kayse, former vice president of marketing solutions for Platform A.

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