Dulles, Va. - Two months after first unveiling the deal, AOL (NYSE: TWX) said on Monday that it has completed its $850 million acquisition of Bebo, a U.K.-based online social network with more than 40 million members.

Bebo, currently the third largest social network in the U.S. -- well behind Facebook and MySpace -- will form the centerpiece of AOL's newly created People Networks unit, which also will include other community platforms such as instant messaging services AIM and ICQ, widget technology company Goowy Media and social search question and answer service Yedda.

Joanna Shields, the CEO of Bebo, will head the unit as its executive vide president.

Randy Falco, the chairman and CEO of AOL, said that the acquisition will help his company better capitalize on the fast-growing social media space.

Bebo has about 100 employees operating in offices in the U.K., San Francisco and Austin, Texas.

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