At the time of the acquisition AOL’s then chairman and CEO Randy Falco said that the deal would allow the firm to “offer advertisers greater reach and marketers significant insights into the desires and needs of consumers”.

However, two years down the line the firm has embarked on a strategic review of the business with a view to selling it or, according to some reports, closing it completely.

In an email to staff, John Brod of AOL Ventures said: “Bebo, unfortunately, is a business that has been declining and, as a result, would require significant investment in the competitive social networking space.”

Brod said that AOL was “committed to working quickly” to determine if there were any interested potential bidders.