Updated: AOL May Finally Have A Bebo Solution

A couple of weeks after Tim Armstrong admitted there was interest in Bebo, AOL (NYSE: AOL) may well have a buyer for the social net. It’s highly unlikely the price tag will be anywhere near the steep $850 million the last regime paid for the service two years ago. Mashable reported a sale has gone through, citing an anonymous source. AOL didn’t confirm but a spokesowoman didn’t deny it either or use the usual “no comment” on rumors and speculation, saying only that “we haven’t announced anything yet.”

The WSJ, also citing unidentified sources, says the buyer is private investment firm Criterion Capital Partners, which specializes in turning around small-sized companies. It lists a startup charter school, a commodity goods manufacturer, and a specialty jewelry chain among the case studies on its website.

Update: No one is expecting anything near the price that AOL paid for Bebo, but PEHub reports, citing unidentified sources, that the social net could be sold off to Criterion Capital Partners for as little as $2.5 million, with AOL pushing for $5 million.

Bebo was supposed to be the company’s social media linchpin, acquired as a quick fix instead of a DIY approach. The high price and subsequent lack of payoff from that strategy is one of the reasons Time Warner (NYSE: TWX) brought in Armstrong from Google (NSDQ: GOOG) as CEO last year. His content-driven vision for AOL left little room for Bebo, which was put in an emerging ventures group. In April, the company said it would complete an internal review by the end of May with the likelihood that it would be shut down or sold.