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WASHINGTON, KOMPAS.com - AOL plans to close or sell the social networking site Bebo, which bought 850 million U.S. dollars two years ago. According to a memo from management that was published on Tuesday (7/4/2010).

"Bebo, unfortunately, become a business that has declined and as a result require significant investment to compete in the competitive social networking space," said a memo from Jon Brod, executive vice president of AOL Ventures. He states, proposals to sell or close the site Bebo this year will be delivered in the company's strategic evaluation in the near future.

Brod stressed this time, AOL was not in a position to further fund and support the pursuit of competition in the Bebo social networking service business. However, AOL will ascertain whether there are parties interested to take over Bebo.

Bebo has steadily losing its competitive edge against social jejaringan sites like Facebook and MySpace. Tim Armstrong, a former Google executive, has started a round of aggressive cost cutting since taking control in AOL years ago and says he plans to refocus the company on the content, advertising, and communications services.