For anyone seeking perspective on the social-networking business, the news that AOL has sold Bebo for what sounds like a fire-sale price should be required reading.

AOL is set to reap an "exceptionally uninspiring" sum for Bebo, the moribund social networking site for which it paid $850m just two years ago.

The Wall Street Journal says a sale could be announced today, with the likely buyer Criterion Capital Partners LLC of Studio City California. This is an interesting location – a suburb of LA nowhere near Silicon Valley.

The deal was confirmed this afternoon, though no details of the price were revealed.

The buyer apparently specialises in turning around companies with revenues of $3m to $30m, which doesn't say too much for the state of Bebo.

Still, it's AOL that is taking a bath on the deal. The journal, ahead of the official announcement, quoted one source familiar with the negotiations who said AOL's price was "an exceptionally uninspiring number" with almost total "value destruction".

As the say in the small print, the value of investments may go down as well as up.