It's reassuring to have prejudices confirmed; politicians are corrupt, blondes have more fun, and AOL is hopeless. The former internet giant yesterday confirmed the sale of Bebo – a social networking site bought for $850m in 2008 – but did not disclose the likely nominal sale price. Such value destruction is less than the worse deal of the century, the dotcom era merger with Time Warner, but that is small consolation to shareholders given AOL stock is down a 10th since December's spin-out.

As a mess of businesses is slowly untangled, however, it is at least becoming clear what AOL thinks its purpose in life ought to be. Search is now an afterthought in a market controlled by Google, and dial-up internet is in terminal decline. So for at least the third time, and following in the footsteps of larger competitor Yahoo, AOL is setting out to become a media company producing content advertisers will pay for.

The company has hired 500 full-time journalists – including nine Pulitzer prize winners – and plans to hire hundreds more, mostly for a hyper-local news service. A collection of about 80 online brands – including technology site engadget and celebrity news outlet TMZ – are to be grouped into a collection of more focused networks. Actually making the reorganisation work will be a mean feat, but falling technology and media costs as AOL taps a network of more than 30,000 freelancers will help. Barriers to entry remain low, yet AOL's existing large audience should be an advantage in promotion.