AOL IS TO shell out $850 million for the social media network Bebo. The announcement could be seen as something of a surprise after a desperate plea on Tuesday by Time Warner CEO, Jeffrey Bewkes, for someone to please buy out his money haemorrhaging Internet branch.

Buying the social not-working site, which the company reckons is the most popular of its kind in, err, Ireland and New Zealand, could be part of an AOL strategy to become a public Web site generating income from high traffic and advertisement, much like Yahoo and the Vole's MSN.

Bebo is said to have a total global membership of over 40 million and is also popular in Britain and the US, though it comes in third place to the more popular MySpace and Facebook. The company has at least 100 employees, spread out between offices in the U.K., San Francisco and Austin, Texas.

AOL sees Bebo as an advertising goldmine and notes that its users rack up about 78 page views in an average 33 minutes a day on the site. They reckon that this will allow them to offer advertisers more access and user specific targeting.

It could be a good move for the floundering company. Research outfit eMarketer recently released a report predicting that by 2011, $4.1 billion will be spent worldwide for social network advertising – a huge increase from the $480 million spent in 2006. µ