In an unexpected move, AOL announced that it has entered an agreement to acquire Bebo for $850 million, the number one social networking platform in the U.K. Bebo was a startup founded in year 2005, experienced exponential growth especially in the U.K. and attracted more than 40 million users worldwide. Also valuable is Bebo’s principle of original content, it has pioneered the blending of original content in the social networking industry by co-producing a TV show entitled “Kate Modern”.

This was an important move for AOL in its bid to seriously challenge the leading position of MySpace and Facebook, and also put to rest rumors that AOL is pursuing a deal with Yahoo! in the midst of Microsoft-Yahoo! merger plan.

Bebo, headquartered in London, has approximately 100 employees operating in offices in the UK, San Francisco and Austin, Texas.

To know what’s going on Bebo, watch the video of Joanna Shields, President of Bebo discussed about Bebo, as embedded in the below.