AOL looking to sell or shut down social site Bebo

SAN FRANCISCO (AP) — The struggling Internet company AOL Inc. plans to sell or shut down the online community Bebo nearly two years after buying it for $850 million in an expansion of its social-networking ambitions.

In an e-mail to employees Tuesday, Jon Brod, who runs AOL's startup acquisition and investment unit, AOL Ventures, said Bebo would need a "significant investment" to remain competitive.

Although Bebo has been in the shadow of rivals such as Facebook, it has been strong in foreign markets, including Britain.

AOL wanted to tap that strength abroad to drive traffic to AOL's other free, ad-supported Web sites, especially internationally, while leveraging AOL's instant-messaging communities, AIM and ICQ, to try to grow Bebo in the United States.

But Bebo's audience has instead been slipping in the U.S. According to comScore Inc., Bebo had 5.1 million U.S. users in February, down from 5.8 million a year earlier and a sliver of the 210 million that Facebook has.