AOL to buy Bebo for $850m

AOL, part of the Time Warner media empire, is to acquire leading social networking website Bebo in an $850m (£417m) cash deal.
 
AOL, part of the Time Warner media empire, is to acquire leading social networking website Bebo in an $850m (£417m) cash deal.
 
Bebo, founded by British-born Michael Birch and his partner Xochi in 2005, claims to have around 40 million monthly users worldwide.
 
The surprise deal marks a major push by AOL to grow its social media business, which consists of AIM, a cross between messaging and social networking, and personal communications network ICQ.
 
AOL said that the acquisition of Bebo, which has gone beyond its social networking roots to launch online dramas such as Kate Modern and strike deals with TV broadcasters, will give it a “network of approximately 80 million unique users”.
 
Randy Falco, the chairman and chief executive of AOL, said: “Bebo is the perfect complement to AOL’s personal communications network and puts us in a leading position in social media.
 
“What drew us to Bebo was its substantial and fast-growing worldwide user base, its vision of a truly social web, and the monetisation opportunities that leverage Platform A across our combined global audience.
 
“This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”
 
Platform A is AOL’s display advertising business, which include advertising networks Advertising.com and buy.at as well as adserving business Adtech.
 
Joanna Shields, the Bebo president, added: “AOL understands the shifting dynamics of the web and has clearly demonstrated its commitment to leveraging the ever-increasing power of social networks.
 
“With one and the same vision in this area, it was a natural progression for Bebo to join AOL, and we look forward to working together to continue to expand the online social experience globally.”
 
Following the takeover, Shields will continue to run Bebo and will report to Ron Grant, AOL’s president and chief operating officer.
 
Google bought a 5% stake in AOL in December 2005 for $1bn.

BT raises cost of weekday calls by up to 1,900%

BT has announced a 23% increase in the cost of making daytime calls and higher line rental charges for the 10.8 million customers who are on its most basic tariff.
BT has announced a 23% increase in the cost of making daytime calls and higher line rental charges for the 10.8 million customers who are on its most basic tariff.
 
From April 1 the cost of making a daytime call from a BT landline will rise to 10p for the first minute, and 4p for every subsequent minute – up from 3.25p. The company has also raised the monthly landline rent from £11 to £11.75, and made evening and weekday calls more expensive. A five-minute daytime call will now cost 24p.
 
To offset the higher charges, BT has introduced free weekend calls for those on its Option One package – with immediate effect. It has also lowered the cost of its all-the-calls-you-can-make deals.
 
BT said customers who agreed to pay by direct debit, and receive their quarterly bill by email, could avoid the landline price hike. They will pay £10.50 a month from April.
 
Gavin Patterson, group managing director of BT consumer, said: “Our research shows that customers prefer to know what their bill will be in advance and that’s why we’ve cut the price of our inclusive plans.”
 
Steve Weller, head of communications at uSwitch.com, said the increase in landline costs alone would make BT £80m a year. “The announcement signals BT’s ongoing intention to drive customers on to its inclusive calling plans and also to opt for paperless billing,” he said.
 
“Customers on the Option 1 and 2 tariffs will see the cost of daytime calls rocket. Other changes mean that a one-hour call on a weekday evening will now cost 90p – a 1,900% increase.”