AOL on Thursday claimed it could “supercharge” the revenues from advertising on social networks after the Time Warner-owned portal agreed an $850m offer for Bebo, the closest rival to Facebook and MySpace.

The all-cash deal will crystallise a fortune of roughly $595m for Michael and Xochi Birch, the husband and wife who own 70 per cent of the site they founded in July 2005. The two entrepreneurs have built Bebo into one of the most popular social networking sites in the US, with strong followings in the UK, Ireland and New Zealand.