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Microsoft has started talks with Time Warner to buy its AOL subsidiary. AOL, formerly America Online, has emerged as an alternative for the software giant which, in results reported last week, recorded a net profit of £2.2bn in April-to-June but lost around £445m from its online advertising division. Silicon Valley insider Henry Blodget said a team from Time Warner/AOL met executives at Microsoft’s Seattle headquarters last Tuesday. "The two have talked many times before. But this is reportedly the closest the companies have come to a deal so far," said Blodget. "It sounds as though Microsoft is now working more diligently on a Plan B."

View: Full Story at the Scotsman

AOL announced today that it has entered into an agreement to acquire social media network Bebo. With a total membership of more than 40 million worldwide, 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. The acquisition will give AOL a boost in the fast growing and increasingly profitable world of social media. Under the terms of the agreement, AOL will acquire Bebo for $850 million in cash. Upon closing the transaction, current President Joanna Shields will continue to run Bebo and will report to Ron Grant.
“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 of AOL. “This positions us to offer advertisers even greater reach and marketers significant insights into the desires and needs of consumers.”