-By Mike Shields, Mediaweek

NEW YORK Despite intense pressure from Wall Street, slowed revenue growth and apparent management dysfunction, AOL continues to be aggressive on the acquisition front. The Time Warner-owned Web pioneer said Thursday that it has agreed to acquire Bebo, a fast-growing social networking site best known for its popularity in the U.K., for $850 million.

According to AOL, Bebo claims 40 million registered members worldwide, including a strong presence in Ireland and New Zealand. The site, which has a growing U.S. audience, shares several aspects of much larger rivals MySpace and Facebook, as users can create personal profiles, share photos and videos, listen to music and generally express themselves.

Bebo has also recently emerged as an entertainment hub for professionally produced, long-form video content. The site is part of the CBS Audience Network and thus offers streaming of episodes of shows like Survivor and CSI. And last November, in something of a landmark move, the site announced that it was opening its doors to any content provider that wished to post video -- free of charge. (That announcement resulted in free distribution arrangements for content players such as MTV, Turner, BBC and ESPN.)

Bebo is also the official distribution outlet for KateModern, the teen mystery/soap series that is the descendant of the first Web video hit, lonelygirl15.

With Bebo, AOL plunges head first into the red-hot social networking space, albeit a space that has yet to establish long-term advertising model. AOL said that Bebo's audience meshes well with its popular instant messaging platforms, AIM and ICQ, which will in total reached 80 million unique users. "Bebo is the perfect complement to AOL's personal communications network and puts us in a leading position in social media," said AOL chairman and CEO Randy Falco, in a statement.

Upon completion of the deal, current Bebo president Joanna Shields will continue in her current role, reporting to AOL's president and COO Ron Grant.

For AOL, the move comes just days after the company ousted Curt Viebranz, who had been president of its Platform-A division since its inception last July and replaced him with Lynda Clarizio, the previous president of Advertising.com. AOL had formed Platform-A following a string of acquisitions in the ad network space.