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AOL has closed its acquisition of Bebo, which it plans to fold into a new People Networks business unit.

The new unit will include Bebo, AIM, ICQ, and AOL's other community platforms, with a reach of about 80 million users worldwide, the company said Monday. Joanna Shields, CEO of Bebo, will serve as executive vice president of AOL and president of People Networks.

AOL in March announced the $850 million acquisition of Bebo, designed to boost the company's international presence. The youth-oriented social network is popular in the United Kingdom, Ireland, and New Zealand.

The new unit will combine several social-media technologies at AOL. People Networks will also include widget technology company Goowy Media and social-search question-and-answer service Yedda.

The plans call for cross-distribution of AOL and Bebo content and applications. For example, AOL will promote Bebo's original programming across several AOL channels, and Bebo will integrate AOL music and entertainment content.

Brightcove, the Internet-video syndication and services company, announced on Monday that video content from its customers will appear on social-networking sites: Bebo, Meebo, RockYou, Slide and Veoh.

Brightcove helps media companies display their video over the Internet and offers varying services for managing video including publishing, distribution and advertising.

CEO Jeremy Allaire has amassed a customer list that reads like a who's who of media conglomerates, such as CBS, HBO, The New York Times, The Wall Street Journal, and 20th Century Fox.

The new deal means that Brightcove customers will have access to the combined 300 million monthly visitors of the social networks.

(Credit: QQ)

I just returned from a trip to Shanghai, and in case you didn't know anyway, here's my No. 1 insight: China scales.

Let's take QQ.com as an example, the leading Chinese online social network. The site is reported to have more than 300 million active accounts. That is eight times the member base of Facebook--and it's the same size as the U.S. population.

What's also remarkable (and different from the Western social networks) is QQ's monetization. Facebook posted revenue of $150 million for 2007 (and according to Plus8star a loss of $50 million); MySpace.com (purchased by News Corp. for $560 million) is projected to generate $750 million in revenue this year; and Bebo (purchased by AOL for $850 million) had revenue of just $20 million in 2007. While QQ reported revenue of $523 million and an astonishing operating profit of $224 million in 2007. The revenue distribution is unusual, too: 60 percent of the revenue came from services like games, an additional 21 percent from mobile services like ringtones, and only 13 percent from online advertising.

Do added value services trump ad based revenue models?

The book's opening line is: "Helen has just registered on Facebook."

Sentence two, if it gets enough votes by Facebook users, would be: "Friends have been telling her for a long time to do this, but for some reason she had continually postponed this moment. Why? She could not answer this question exactly."

The rest is up to online wordsmiths who choose to install a community book-writing application called LiveBook, launched on Tuesday by both Facebook and the Bebo social network.

In a sort of Exquisite Corpse game for the Web 2.0 set, LiveBook, for now anyway, involves two books: the aforementioned story about Helen, in progress by Facebook members; and a totally separate story Bebo users are writing about a fictitious newly joined member, Brian.

Users who install the LiveBook application can view the evolving manuscript, propose the next sentence, and/or vote on a pending next sentence. The first sentence to collect 10 votes will be entered into the book.

LiveBook claims it's the first known "attempt to give writing a book completely over to the will of a free community of social networks."

I'm particularly interested to see what happens to Helen, who for now anyway, has a lot in common with me...I had to register to Facebook for the first time to check out the app. I might propose this next sentence: "Now she is completely buried in friend-related e-mails and can't get any of her work done."

CNET News.com reporter Caroline McCarthy co-wrote this article.

Life is getting more difficult for social-networking sites.

At the same time Facebook's traffic appears to have reached a plateau, News.com has learned that Piczo, a networking site that caters to teenage girls and was much written about in 2006, has seen layoffs, executive departures, high employee turnover, and a shrinking audience in the past five months.

Three former Piczo employees described a company grappling with the meteoric rise of competitors Facebook and Bebo and internal squabbles over the direction of the 3-year-old start-up. Piczo has also struggled to convince advertisers that social networking is an effective ad vehicle--a tough sales pitch for the entire sector, say insiders.

Parker Ranney, the company's former director of operations who left to join a start-up in January, said Piczo's layoffs were designed to help the San Francisco-based company "restructure so it could put more focus on Europe." But he also said Piczo is working through "an issue of monetization" just like everybody else in social networking.

Jeremy Verba, Piczo's CEO, said two employees were laid off in November. He declined to discuss how many people have left the company since then. Verba said Piczo now has 32 employees. But two sources who wished to remain anonymous because they might have to work with Piczo again said Friday that about 10 additional people left the company soon after the layoffs. The total number of departures equaled about 25 percent of Piczo's then 40-employee staff.

In addition to Ranney, the company's director of technology and vice president of marketing also left to join other companies. Michael Arrington of TechCrunch was first to report on the departure of Piczo's marketing vice president back in November. He wrote then: "Employees generally don't leave hot startups."

Verba said companies often see turnover as they move out of the start-up phase and into a more mature stage of their development. He added that while Piczo is not yet profitable--and declined to specify when it might be--the company has plenty of money in the bank.

Back in 2006, Piczo was a high flyer in social networking. The company was featured in a Wall Street Journal story, was adding 35,000 new registered users per day, and had attracted $18 million in venture funding. Investors included Mangrove Capital Partners Sierra Ventures and Catamount Ventures.

Since then, the company's traffic has continued to slide. According to Comscore, Piczo saw 1.1 million U.S. unique users in August 2006, but last month had 810,000 users. In the United Kingdom, where Piczo is the No. 1 teen networking site, the company has been impacted by the growing popularity of Bebo and Facebook, Verba said.

The British publication, The Times reported Thursday on its Web site that over the past year Piczo has seen the number of visitors from that country decline by 56 percent.

"We were in the United Kingdom early, and certainly as (Bebo and Facebook) came on, that affected us," Verba said. "Our growth started slowing. But it's a time-spent issue. Our users didn't move on to these other sites. What we're seeing is a lot of overlap. What happened is some of our engagement decreased."

Verba said shrinking traffic is occurring at all of the sector's top competitors.

"That's what's going on in the industry," Verba said. "In general, (traffic) has flattened out. It's going to be a natural level that networks settle out at. It has to do with seasonality. It has to do with competition. It has to do with product development."

More than a few tech industry onlookers have been wondering when a downturn in the red-hot social-networking market would set in. A social network relies so heavily on user interaction that even if it experiences a small exodus, that can snowball into something much bigger. The news about Piczo comes amid reports from audience measurement firms that traffic at Facebook, the most-talked-about company in Silicon Valley for almost a year, is on the decline. Users are simply tired of it, some blog pundits have argued, and they won't stay on any one site too long before moving on to the next big thing.

Jonathan Abrams, who founded onetime social-networking leader Friendster in 2002 and left in 2004 amid a company shakeup, doesn't believe the "users are inherently fickle" maxim. If a social network isn't doing its job, then yes, members will leave. "Friendster ended up having technical and management problems for two years," he admitted. "It has very little to do with users just being fickle, because the site just wasn't working for two years."

Rather, Abrams said, inconsistency in a social network's performance or user experience can cause those users to become dissatisfied. Amid instability at Friendster, many users famously left for the then-nascent MySpace.com, now owned by News Corp. "If there had been no alternative whatsoever, I suppose people might've been more patient with a site that was so slow and buggy," he said, "and if the site had been working properly, MySpace might never have grown the way it did."

Friendster wasn't the only buzzworthy social-networking site that faded away. "We wanted to compete with Craigslist," said Mark Pincus, a Friendster investor who founded the personals-like Tribe.net, which caught on in the early part of the decade among the San Francisco Bay Area Burning Man. His mistake, he said, was that he didn't foresee the coming competition in the market. "I thought that there'd be no other social networks besides Friendster."

But the debate over whether Web users are fickle about their social-networking preferences doesn't even matter when a site can't gain the critical mass it wanted. There simply isn't a whole lot of room in the market for newcomers.

Social networking site Bebo, with a 36-million-strong member base centered primarily in the U.K., announced Tuesday that it has partnered with Microsoft on a new instant messaging initiative. The Windows Live Messenger service, formerly known as MSN Messenger, is now the fuel behind Bebo's new internal IMing operations.

Bebo users who have hooked their Windows Live usernames up to the service have an "IM Me" button on their profiles that they can use to communicate with other members in-browser if they're online, but Bebo's IM is also open to members without Windows Live Messenger. Essentially, the partnership integrates existing Windows Live accounts into Bebo and also provides a robust base for the Web-based chat interface.

A peek at Bebo's IMing service with the Windows Live logo button.

(Credit: Bebo)

Don't think that this deal necessarily has broader implications in today's acquisition-happy digital media culture--the Microsoft partnership is strictly limited to Windows Live Messenger at this point. Bebo's internal search, after all, is powered by Yahoo, which has been talked up as a possible buyer for the independent social networking site.

Rival MySpace launched its instant messaging service earlier this summer, but has kept it separate from other IM clients like Windows Live Messenger, Yahoo Instant Messenger, or AOL Instant Messenger (AIM). Facebook, meanwhile, does not offer an internal IM service--but several third-party developers have created them for the Facebook Platform.

Helio's Buddy Beacon was hyped, but it's the social networking mainstays that are actually getting used by mobile customers.

(Credit: Flytip.com)

New research from the mobile-focused statistics firm M:Metrics has focused on exactly how many mobile-phone customers are using their handsets to access social networks and blogs, and the results aren't particularly surprising: not a whole lot of people are.

In the month of June, a total of only 12.3 million mobile consumers in the United States and Western Europe (France, Germany, Italy, Spain, and the United Kingdom) accessed a social-networking site or blog on their phones at least once. In the U.K., this came out to a total of only 2.5 percent of mobile users; 2.8 percent in Italy; 2.3 percent in Spain; 1.9 percent in Germany; and only 1.5 percent in France.

Interestingly enough, the highest percentage (3.5 percent) was in the U.S., which is typically thought to lag behind European and Asian countries in mobile-media consumption.

Mobile social networking is something that you hear a lot about, and not just because Facebook has just launched an iPhone-optimized site. As the M:Metrics results show, Web and mobile-media companies can see plenty of potential for growth simply because there isn't a whole lot of social networking going on in the mobile space yet.

Sometimes, the potential for growth has led companies to attempt to develop strictly mobile social-networking features--often carrier-specific, such as those of Helio's GPS-based "Buddy Beacon" service. But not surprisingly, it's the mobile-optimized versions of existing popular social-networking sites that have proven to be the early leaders.

In the U.S. and U.K., MySpace.com's mobile site is the most popular (despite only being available on several carriers) with 3.7 million users in the U.S. and 440,000 in the U.K.; Facebook comes in second place with 2 million users in the U.S. and 307,000 in the U.K.

Third place in the U.S. was YouTube, with 901,000 mobile users; third place in the U.K. was Bebo, with 288,000. (Recently, another firm's statistics showed that Bebo may be passing longtime leader MySpace in the U.K. when it comes to unique visitors.)

In the four other European countries, MSN Live Spaces was the most popular mobile social network. Also of note is the fact that in France, Germany, Italy, and Spain, the 13-to-17 age demographic was the one doing the most mobile social networking; in the U.S. and U.K., it was the slightly older 18-to-24 demographic.

(Credit: ComScore)

Some interesting ComScore numbers have just been documented by CNET's sister site ZDNet: social-networking site Bebo, always more of a presence in the U.K. than stateside, has soared ahead of global leader MySpace on its home turf. In the month of July, the ComScore statistics say, Bebo logged 10.7 million unique visitors in the U.K. and MySpace trailed with 10.1.

This marks the first time that ComScore's statistics have shown Bebo ahead of MySpace. And it should be noted that these pertain to unique visitors, not registered users or page views.

In third place, not to be discounted, is Facebook with 7.6 million unique visitors in the U.K. in July. The formerly college-based "social utility" has been gaining speed abroad as well as in the U.S., and London has recently surpassed Toronto as its largest regional network.

Statistics house ComScore released some numbers on Tuesday pertaining to how quickly a handful of popular social-networking sites are growing worldwide, and which ones dominate in which regions of the globe. There's nothing all too notable here, as the global reach of various social-networking sites has been well-documented already--and even mapped. But it's always cool to see numbers, which I suppose is why companies like ComScore exist in the first place.

The main set of numbers tracks worldwide social-networking growth, with June 2006 and June 2007 as the benchmarks, for seven services: MySpace, Facebook, Bebo, Orkut, Hi5, Friendster, and Tagged. Tagged, one of the smaller and newer of the bunch, showed the greatest overall growth--a 774 percent increase from 1,506,000 unique visitors in June 2006 to 13,167,000 unique visitors in June 2007. That could be because the San Francisco-based social network simply wasn't on the map until recently; it was founded in 2004 but scored its first round of venture capital in February 2006.

Facebook has, as one may imagine, also grown quite a bit--270 percent, from 14,083,000 uniques to 52,167,000. ComScore charts Bebo as having grown about 172 percent, and Orkut as having grown about 78 percent.

Friendster might be considered an also-ran, at least in the U.S., but according to ComScore's statistics, it's growing almost as quickly as MySpace: 65 percent versus 72 percent. That being said, Friendster's unique visits went from around 15 million to around 25 million, while MySpace's went from about 66.5 million to over 114 million, so we're clearly dealing with vastly different magnitudes here.

Interestingly enough, Hi5, which I've heard talked about as a rising star in the social-networking world, has been growing at a crawl compared with the others--only 56 percent growth from June 2006 to June 2007.

The ComScore statistics also charted where visits to social-networking sites are coming from, based on worldwide region: Out of the seven social-networking sites, the two with the most "balanced" user bases worldwide are Tagged and Hi5. Tagged, according to the ComScore numbers, has 22.7 percent of its base from North America, 14.6 from Latin America, 23.4 from Europe, 10 from Africa and the Middle East, and 29.2 percent from Asia and the Pacific region. Hi5, similarly, is 15.3 percent North American, 24.1 percent Latin American, 31 percent European, 8.7 percent African/Middle Eastern, and 20.8 percent Asia-Pacific.

MySpace and Facebook both have large percentages of their users in North America (62.1 percent for MySpace, 68.4 percent for Facebook) with sizeable portions in Europe (24.7 percent for MySpace, 16.8 percent for Facebook) and single-digit numbers in all other regions. Bebo, most popular in the U.K., is largely the opposite, with 62.5 percent of its users based in Europe, 21.8 percent in North America, and few elsewhere.

Orkut, famous for having a user base virtually restricted to Brazil and India, understandably has almost half its user base in Latin America, almost half in Asia-Pacific, and almost none anywhere else. Friendster, meanwhile, leans the most disproportionately toward a single geographic market: it gathers nearly 89 percent of its user base from the Asia-Pacific region.