AOL Inc. is preparing to sell off its social-networking site Bebo according to a report in the Wall Street Journal.
The firm is prepared to flog the site for a small fraction of the $850 million it paid for it two years ago, the report claims.
According to the journal's source, investment outfit Criterion Capital Partners LLC of California is prepared to take the site - which is popular with teens - off AOL's hands.
An announcement is expected today.
AOL acquired Bebo when it was under the Time Warner umbrella, following another overpriced deal. At the time, Time Warner CEO Jeff Bewkes called Bebo the "riskiest acquisition" the company made that year.
He was right. While rival Facebook has gone from strength to strength - in terms of the amount of people using it at least, Bebo has declined. According to Comscore, the site lost 44 per cent of its US membership over the past year.
"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," Jon Brod, executive vice president of AOL Ventures, wrote in an email to employees last April. "AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking."
Evidently, it's taken 12 months to find a buyer.
Neither AOL nor Criterion would comment on the matter.