With Bebo a No-Go, AOL Will Unload the Social Site

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Ending a failed attempt to capitalize on the social-networking craze, AOL Inc. is close to selling its social-networking site Bebo to a private investment firm at a fire-sale price, according to people familiar with the matter.

AOL is in final talks to sell Bebo for a small fraction of the $850 million it paid for the site two years ago—the latest example of a hot Internet property that faded in popularity before figuring out how to make money.

The buyer is Criterion Capital Partners LLC of Studio City, Calif., according to a person familiar with the matter. The small investment firm has been actively pursuing technology and media acquisitions, this person said. A deal could be announced as soon as Thursday.

Exact terms of the deal couldn't be learned, although one person said it was "an exceptionally uninspiring number" with almost total "value destruction."