AOL waving bye bye to Bebo

AOL plans to either sell or shutdown Bebo in 2010, according to a company-wide memo.

The memo comes just two years after AOL splashed out a sizeable $850 million on the social-networking site, which has struggled to make headway against the rapidly growing Facebook and Twitter.

“It is clear that social networking is a space with heavy competition, and where scale defines success,” the company said.

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

“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 has claimed the fate of Bebo and its 40 employees will be decided by the end of May. There’s no word on what will become of the data stored on Bebo’s servers.

The decision follows AOL’s spinoff from parent company Time Warner, and the company acknowledged that “we are in a turnaround and that we need to get the company as focused as possible.”