Less than a week ago, the former president of Bebo joined Facebook, and now, AOL's admitted that the social network it bought for $850 million has been beaten by Mark Zuckerberg's leviathan.  AOL intends to either sell or shut down Bebo in the near future.

Jon Brod, Executive Vice President of AOL Ventures, wrote in an internal memo obtained by Staci D. Kramer, "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."

Brod then assigned a timeframe to the decision-making process by stating, "AOL is committed to working quickly to determine if there are any interested parties for Bebo and the company's current expectation is to complete our strategic evaluation by the end of May 2010."

This is an embarrassing move for AOL, considering the price it paid for Bebo just two years ago.  On the other hand, considering the degree to which Bebo has failed to be competitive with Facebook and MySpace, it's probably smart for AOL to stop sinking time and money into the site.

There hasn't been so much as a whisper about possible buyers or costs just yet.  If more information becomes available, we'll be sure to report it.