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AOL has long regretted its $850 million purchase of social network Bebo, and ever since CEO Tim Armstrong came on board it’s pretty much been left to die on the vine. AOL is preparing a filing in the UK to alert regulators there of its plans to either sell or shut down the site. While a sale seems like the logical way to go, Bebo is pretty much worthless now and for tax reasons it might make more sense to simply shut it down.

In an email sent out to employees today, AOL explained:

As we evaluate our portfolio of brands against our strategy, it is clear that social networking is a space with heavy competition, and where scale defines success. 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. AOL is not in a position at this time to further fund and support Bebo in pursuing a turnaround in social networking.

AOL has been thinking of selling Bebo for more than a year, and already wrote down much of the acquisition. So it already swallowed the loss. The only question now is what is the most efficient way to dispose of it.

Photo credit: Flickr/Hoggarazzi

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Source: AOL Is Ready to Throw in the Towel on Bebo