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AOL announced its intention to purchase social networking site Bebo for $850 million prompting many to wonder what exactly was Microsoft thinking buying a 1.6% stake in Facebook for $240 million.  Using some advanced math skills, that puts the suspected value of Facebook at $15 billion.  But is that fair?

No.  In the Microsoft deal, Microsoft got 1.6% of the company but also got something more, a lot more.  They secured advertising rights until 2011.  Clearly, Microsoft values the advertising relationship very highly as a Facebook of$15 billion makes all of our scalps quite itchy.  A lot of bloggers missed this important facet of the Microsoft deal, but not this guy.

Who is Bebo?

With a total membership of more than 40 million worldwide, Bebo is a global social media network which combines community, self-expression and entertainment to enable its users to consume, create, discover and share content. Bebo is one of the leading social networks in the UK, and is ranked number one in Ireland and New Zealand, and number three in the U.S. Its users are heavily engaged and view an average of 78 pages per usage day.

Yeah, thats right, #1 in techy Ireland, take that MySpace!  AOL is working to cast itself as an ad platform, the really hot thing to do right now.  This addition will propel AOL audience to roughly 80 million people, which is larger than Facebook’s clan of 67 million, but still smaller than MySpace‘s audience.

Read [BusinessWire]