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Bebo's parent company, AOL, has said it will sell or shut the website. Photograph: Linda Nylind Bebo UK plunged into the red last year as post-tax profits fell 143% year on year in the 12 months to the end of May 2009, a performance that led its parent, AOL , to decide to sell or shut the struggling social networking website. The social networking website's UK business moved from a healthy post-tax profit of £2.6m in the previous year to a loss of £1.1m, a 143% year-on-year fall, according to figures for Bebo UK Ltd filed at Companies House. AOL acquired Bebo in 2008 for $850m (£550m) . Companies House figures show that turnover fell 29% year on year, from £8.8m to £6.2m, for the period, while operating profits were down 32% from £798,560 to £541,268.

AOL’s struggle to make Bebo profitable is not the first time that a social network has brought trouble to its new owners. Both the purchase of MySpace by News Corporation and of Friends Reunited by ITV has coincided with those networks losing huge amounts of value: Rupert Murdoch paid £364 million for MySpace, while ITV paid £175 million for Friends Reunited. MySpace is now valued for “next to nothing” according to former Merrill Lynch analyst Henry Blodget, and ITV sold Friends Reunited for £25 million last year.

Users of AOL's main instant-messaging service can now chat directly with friends on Facebook. AOL Inc. said Wednesday that a new version of the AIM software connects with the chat function on Facebook's Web site, letting AIM users communicate with friends who are logged on to the social network. The AIM user still needs a Facebook account, however, and it's the Facebook persona rather than AIM's that appears to the friend on Facebook. Users who download the new AIM software and link it with their Facebook profile will see their AIM buddy list include online Facebook friends in a separate section.