The New York Times reported today that AOL would buy out Bebo, the third most popular social networking site on the internet.

Bebo is a social networking site, similar to Myspace and Facebook. Myspace was recently purchased by the News Corporation, and Facebook was recently bought out by Microsoft. AOL is trying to enhance it’s main application – Instant Messenger – so that it can remain competitive with Google, Yahoo, and Microsoft. If AOL can successfully integrate Bebo with AIM, it can potentially profit from millions of new users.

This acquisition by AOL is another example of a double-edged trend. Recently, many internet companies have been acquired by larger corporations – like Google, AOL, and Yahoo. The big companies are competing with each other and purchasing smaller companies to do so. This can be good for the smaller entrepreneurs – the founders of Facebook and MySpace are very wealthy. However, it also suggests that start-ups cannot survive on their own. Sooner or later, a successful application or community will be swallowed up by one of the larger corporations.