A year and a half ago, when takeover rumours were circling Bebo, founder Michael Birch said $1bn was "a ridiculous amount of money" for the company. Yesterday, AOL paid not much less than that to get hold of the three-year-old site.

UK-born Mr Birch, 37, and his Californian wife Xochi, 36, will be walking away with the bulk of the $850m in cash that AOL is paying for the business. They hold about 70 per cent of the stock, Balderton Capital has 15.7 per cent and the remainder is held by staff and family members.