To expand the reach of its advertising, AOL has acquired teen social networking site Bebo for $850m in cash.

Bebo, an acronym for “Blog early, blog often”, is an online social media network similar in format to MySpace, Xanga, Facebook, and Yahoo! 360.

According to AOL, Bebo has a total membership of more than 40 million worldwide and is ranked number one in Ireland and New Zealand, and number three in the US in terms of engagement.

In October, Microsoft paid $240m for a 1.6% stake in Facebook.

According to Alexa Internet, social networking website MySpace is currently the world’s fifth most popular website, and the third most popular website in the United States.

Google CEO Eric Schmidt tells that a Microsoft-Yahoo deal could “break the internet.”

Here is the piece of article which appeared on portfolio
Why does a merged Microsoft-Yahoo pose such a threat to Google?

It’s an unstable situation. But the theoretical issue is the concentration of Microsoft’s resources and its history, combined with the very large share that it would have in certain applications—like instant messaging and email—that could be used essentially to break the internet and diminish choice.

Break the internet?

All internet-based systems today are highly interoperable, open systems. The whole antitrust trial that Microsoft went through was really about it breaking that.

In favor of establishing its own proprietary standards. But what are you going to do about the deal?

We’ve indicated that we don’t think it’s a good idea. All options are open. I don’t want to rule out or rule in anything.

Read the full interview here

Executives from Yahoo and Microsoft are in informal talk about the possibility of a merger deal for the first time since Microsoft’s $44.6 billion offer was rejected by yahoo.

Microsoft’s bid for Yahoo is widely seen to have bigger presence on the Web business.

Microsoft announced that it acquired Rapt, a San Francisco-based software company used by Web publishers to manage advertising sales, for an undisclosed sum.

Rapt’s products are designed to help online publishers improve the pricing and provisioning of online ads.

Microsoft is making series of acquisitions to in an effort to catch Google Inc, to fill out its gap in the advertisers and publishers space.

Rapt’s products include

• Price Director
• Inventory Manager
• Business Advisor

Rapt’s customers include Dow Jones, The Weather Channel, and NBC Universal.