Bebo Takeoover

The importance of social networking websites to the average internet user cannot be overlooked today as Time Warner Inc. announces that it has agreed to acquire Bebo for $850 million.

Bebo is the third biggest social networking site in the USA but is No.1 in Ireland. The main reason that these sites are being bought by these companies is online advertising. Significant profits can be made from selling advertising space.

With a price tag of $850 million it is a big wager on the power of social networking to create an audience for these advertisements but if they continue to gain users like they are doing at the minute, it could be a wise investment. Just look at News Corp. (Fox Television etc.), they bought MySpace for $580 million in 2005 and it is now estimated to be worth more than $15 billion.