AOL abandons Bebo
AOL has decided to sever ties with Bebo amid speculation that the social media site could shut down permanently.
Cost-cutting has been a feature at the search engine giant since the arrival of Tim Armstrong, former Google head of US advertising sales, as chief executive in March 2010. The company has already shed 2,000 jobs and closed several international offices, reports the Telegraph.
And Bebo, which cost AOL $850 million (£557 million) in 2008, has been singled out as the next victim of the cuts. The 30 employees at Bebo UK are being made redundant and the company's central London office will be closed at the end of this month.
AOL emails Bebo staff
In an email to Bebo's global workforce, Jon Brod, head of AOL's start up acquisition and investment unit, said that the search engine giant could no longer support the site. "Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space," he wrote. "AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking."
Bebo is now trying to attract new buyers in a bid to take on established players like Facebook and MySpace. However, the Telegraph claims that Bebo global head Stephane Panier has been in discussions with Mr Armstrong and Mr Brod for the last six months about closing the social media site entirely.
The news marks the latest stage in a turbulent period for AOL. In December 2009, AOL split from Time Warner after continuing to lose ground to Google, Yahoo and Microsoft in the lucrative search market.