AOL -- in need of turning around its business -- has turned to U.K. social networking leader Bebo to make that happen. AOL will purchase Bebo for $850 million in an all cash deal.
While Bebo is an also-ran in the U.S., it leads the pack in the U.K. and is said to generate roughly $50 million in revenues annually. The company is San Francisco-based, and its founders -- the husband and wife team of Michael and Xochi Birch -- will pocket a sizable sum but will not stay on in the AOL integration. Joanna Shields, who was hired by Bebo to grow its business and previously was a senior exec at Google, will lead the way. Venture capital firm Balderton Capital -- based in Europe and jointly created as a separate fund by Benchmark Capital and Benchmark Capital Europe -- also will pocket a nice return. Its original $15 million investment will pocket approximately $140 million.