Online social network Bebo faced an uncertain future yesterday after its parent firm, AOL, revealed plans to sell or shut down the site just two years after buying it for $850 million (£557m).
AOL told employees that Bebo needed “significant investment” to remain competitive, and added it was not in a position to provide the funding.
Bebo has failed to attract users as it fights competition from larger rivals such as Facebook.
It has fared better in Europe and is one of the most popular social networking sites in the UK.
But Bebo has not had the same success in the US, where it had 5.1m users in February, compared with 209.7m for Facebook, according to comScore.
In an email to staff, AOL said: “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.”
It added it was now looking for potential buyers and aimed to conclude its strategic review by the end of May.
Meanwhile, media magnate Rupert Murdoch has called on rival publishers to “stand up” to search engine giant Google and block it from showing their content online for free.
Mr Murdoch told the National Press Club in Washington this week: “We are going to stop people like Google or Microsoft or whoever from taking stories for nothing,” as he defended his decision to introduce online paywalls at some of his newspaper titles.