Bebo sold to AOL for $850m

British internet entrepreneur Michael Birch was celebrating yesterday as Bebo, the social networking website he founded three years ago, was sold for $850m (£417m) to internet company AOL.

Bebo is the world's third-largest social networking website, behind MySpace and Facebook, and claims more than 40 million users.

"This is a tremendous acquisition and one I think is game-changing for AOL," said the company's chairman and chief executive, Randy Falco. "Bebo will be the cornerstone of our strategy."

It is not clear whether the site's users will feel as happy about the change, however, and some experts wondered whether AOL might try to cash in on the site's audience too quickly.

"The smartest thing AOL can do is to leave Bebo well alone in terms of management and day-to-day operation," said Mike Butcher, the editor of technology news website TechCrunch UK. "If they are dumb they'll plaster Bebo in adverts and the users will run for the hills."