Well, that $850 million back in 2008 for the acquisition of Bebo certainly did not pay off for AOL. In fact, they are now trying to get rid of Bebo and focus on their new strategy as a content provider by either shutting it down completely or selling it. This internal letter was sent out to employees today:

The strategy we set in May 2009 leverages our core strengths and scale in quality content, premium advertising and consumer applications, positioning us for the next phase of growth of the Internet. As we evaluate our portfolio of brands against our strategy, it is clear that social networking is a space with heavy competition, and where scale defines success. Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in order to compete in the competitive social networking space. AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking.

AOL is committed to working quickly to determine if there are any interested parties for Bebo and the company’s current expectation is to complete our strategic evaluation by the end of May 2010.

 Bebo had only 12.8 million unique visitors in February, a 45% decline from the previous month. Tim Armstrong, CEO of AOL since March 2009, has created the new focus of providing content for AOL, and mainly since the separation from TimeWarner, they seem to be improving on that focus one step at a time, with ridding of Bebo as the next logical step.