AOL acquires Bebo for 850 million

AOL is a massive company desperate to stay relevant.<p>A good look at their internal dysfunction and struggles over "Platform A" was published yesterday in the NY Times:<p><a href="http://www.nytimes.com/2008/03/12/technology/12aol.html" rel="nofollow">http://www.nytimes.com/2008/03/12/technology/12aol.html</a>

Hmmm... so, AOL paid $850 M for 3.5 million visits a month. That means that they're paying about $250 a user.<p>At the same valuation per user, that values Facebook at a paltry $ 7 billion.<p>Another thought... if users are worth $250 a piece, maybe my blog that has 100 readers a month might actually be worth $25,000! Anyone wanna buy it? :)

AOL has some cash flow - about 9 million subscribers paying $10-$25 for Internet access monthly (<a href="http://tinyurl.com/ytnz3d" rel="nofollow">http://tinyurl.com/ytnz3d</a>)

i've tried reading up on "engagement advertising", but i continue not to understand it. it seems like a fairly empty buzzword for saying that the ads will be micro-targeted (maybe via social networking information you've revealed, like facebook's attempts?), which, to my knowledge, is a concept that hasn't seen much success yet.

As per the YouTube acquisition, perhaps there will be a new surge in social networks! The talent pool proceeds to filter itself.

I thought AOL didn't really have any extra cash laying around? Where did they get the money?