AOL to Acquire Global Social Media Network Bebo

AOL announced today that it has entered into an agreement to
acquire Bebo (http://www.bebo.com), a leading global social media
network. Together with its AIM and ICQ personal communications
network, the acquisition will give AOL a premier position in the fast
growing world of social media with a network of approximately 80
million unique users.

With a total membership of more than 40 million worldwide, Bebo is
a global social media network which combines community,
self-expression and entertainment to enable its users to consume,
create, discover and share content. Bebo is one of the leading social
networks in the UK, and is ranked number one in Ireland and New
Zealand, and number three in the U.S. Its users are heavily engaged
and view an average of 78 pages per usage day. Bebo has approximately
100 employees operating in offices in the UK, San Francisco and
Austin, TX.

The deal comes just one week after AOL´s launch of Open AIM 2.0,
an initiative that allows the developer community greater freedom to
access the AIM network and integrate AIM into its sites and
applications, and the announcement by Apple of a downloadable AIM
application for the iPhone.

Under the terms of the agreement, AOL will acquire Bebo for $850
million in cash.

"Bebo is the perfect complement to AOL´s personal communications
network and puts us in a leading position in social media," said Randy
Falco, Chairman and CEO, AOL. "What drew us to Bebo was its
substantial and fast-growing worldwide user-base, its vision of a
truly social web, and the monetization 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."

"AOL understands the shifting dynamics of the Web and has clearly
demonstrated its commitment to leveraging the ever-increasing power of
social networks," said Bebo President, Joanna Shields. "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."

"Bebo´s dynamic management team recognizes that the Internet is
less about destination and more about connecting people, culture and
lifestyles," said Ron Grant, President and COO, AOL. "This acquisition
supports our key objectives - accelerating the growth, engagement and
monetization of one of the world´s most engaged online communities."

Upon closing the transaction, current President Joanna Shields
will continue to run Bebo and will report to Ron Grant.

Analyst eMarketer predicts that by 2011, $4.1 billion will be
spent worldwide for social network advertising - a dramatic increase
from the $480 million spent in 2006. In 2008 alone, global ad spend in
the social networking arena is expected to increase 75% year over
year, amounting to $2.1 billion (eMarketer, Social Network Marketing:
Ad Spending and Usage, December 2007).

In recent months, AOL has moved aggressively to bolster its
position in areas critical to its emergence as a leading
advertising-supported Web media and marketing company. Building on its
number one position in third party display with Advertising.com, AOL
has spent nearly $1 billion on online advertising acquisitions,
including market leaders like ADTECH, buy.at, Lightningcast, Quigo,
TACODA and Third Screen Media to create Platform-A. Platform-A is the
top display ad serving network focused on helping marketers build
brands that perform online.* In Web content, AOL´s revitalized network
of sites has experienced five months of consecutive page view growth
and key categories like Music, Television, Moviefone, TMZ, Money &
Finance, News, Living and Body are all in the top four in their
respective categories.

As part of its international growth plans, AOL has launched 17
international web sites over the last year and has plans to expand to
30 countries outside the U.S. by the end of 2008. In addition, AOL
teamed up with HP last September to include localized versions of the
AOL.com portal and other AOL services as the default setting on HP
computers shipped in the United States and around the world. Bebo,
which has announced plans to launch in five countries this year, will
be featured prominently in AOL´s international expansion efforts after
the deal is closed.

Since its inception, Bebo has established a radical new vision for
online media and engagement marketing, combining community,
self-expression and entertainment, enabling its members to consume,
create, discover, curate and share digital content in entirely new
ways. Bebo global users have high engagement levels spending an
average of 33 minutes a day on the site. Its groundbreaking Open Media
platform ushered in a new way for Bebo users to experience content
online, while giving global media companies like MTV, CBS, BBC and
more than 400 others, a new way to promote, distribute and monetize
their programming. "Engagement Marketing," is Bebo´s initiative for
brands to build long-term relationships with their target audience.
Today, brands from Apple to Nike use Bebo as a platform to establish
ongoing conversations with consumers.

Bebo pioneered the blending of Web-native original content with
interactivity in the social networking environment by co-producing
"KateModern," the most successful TV show on the Web, now in its
second season, followed by the soon to be premiered "Sophia´s Diary,"
and the upcoming "Gap Year." In December 2007, Bebo opened its
platform to external application developers becoming the first social
network to embrace both Facebook and OpenSocial APIs. To date, more
than 1500 applications have joined the network.

AOL was advised by Banc of America Securities LLC and Deutsche
Bank Securities Inc. Bebo was advised by Allen & Co.

AOL and Bebo senior management will host a conference call
beginning at 9:00 am ET to discuss the day´s news.

-0-
*T
The dialing instructions for the call are:

In the United States: 888-730-9143
Outside the U.S.: 210-839-8553
Passcode: AOL Update
*T

Please dial in at least ten to fifteen minutes before the call´s
scheduled start to ensure you are connected in time for the beginning
of the call.

Note to Editors: Photos, logos and video from today´s announcement
are available on the AOL Corporate Site at http://corp.aol.com.

About AOL

AOL(R) is a global Web services company that operates some of the
most popular Web destinations, offers a comprehensive suite of free
software and services runs one of the largest Internet access
businesses in the U.S., and provides a full set of advertising
solutions. A majority-owned subsidiary of Time Warner Inc. (NYSE:TWX),
AOL LLC and its subsidiaries have operations in the U.S., Europe,
Canada and Asia. Learn more at AOL.com.

About Bebo

Bebo, founded by Michael and Xochi Birch, is the world´s leading
global social media network. Building on the notion of traditional
social networking websites, Bebo combines community, self-expression
and entertainment to enable its users to consume, create, discover and
share professional and user-generated content through the Bebo
website. Bebo has 11.4m unique users in the UK and a total membership
of more than 40 million worldwide. Bebo also ranks as the UK´s most
engaging social network with users spending an average of 33 minutes
on the site per usage day.**

*According to comScore Media Metrix February 2008 data, Platform-A
continues to be the number one advertising network with 167 million
unique visitors and a domestic reach of 90%.

**Source: comScore Media Metrix, Jan. 2008