Facebook forces AOL to pull the plug on Bebo

AOL was today preparing to sell or close social networking website Bebo by the end of May as the dominance of Facebook threatens other rivals such as News Corporation's MySpace.

Analysts said AOL may succeed in selling Bebo, bought for $850 million in 2008, even if it takes a loss.

Bebo UK was today filing annual accounts more than five weeks overdue. It made a pre-tax profit of £800,000 on turnover of £8.8 million in the year to May 2008, but visitor numbers have halved in the last year as its core teenage audience switched to Facebook.

AOL admitted it cannot provide "significant investment" to turn around Bebo, which has just 12.8 million users compared with Facebook's 400 million.

Ian Maude of Enders Analysis said: "With Facebook the audiences have built up very quickly but you can have a reverse effect when people leave the network. MySpace is suffering from a similar problem to Bebo."

Justin Pearse, editor of New Media Age, said: "MySpace still has a good chance of success as it performs well for advertisers and has a loyal audience centred around music."