After the sale, what’s next for AOL and Bebo?

AOL has officially closed the deal to sell social networking site Bebo to Los Angeles-based investment firm Criterion Capital Partners for $10 million. Criterion is buying the Bebo brand, its technology and 50-53 million registered users, according to sources close to the deal.

What the deal doesn’t come with, however, is a staff. Bebo’s employees received severance packages by AOL several months prior to the sale.

Richard Hecker, the member of the new ownership group who originally approached AOL about a deal, said Criterion would aggressively act to retain the management team and maintain Bebo’s corporate culture. Hecker also told VentureBeat that Bebo would be focusing on the British and European markets where the social network is strongest.

Hecker is an entrepreneur from New York City who started his first company, an interactive ad network called ClickZen, when he was 15 years old. He has also founded an outsourcing firm based in India and a New York-based digital media consulting and event production company.

Hecker’s partners in the deal are Adam Levin and Paul Abramowitz. Levin is a banker and former president of CinemaElectric, a mobile content production and distribution company. Abramowitz was the former CEO of Microsoft co-founder Paul Allen’s interactive museum, the Experience Music Project, as well as CEO of green roof firm Etera.

While this unlikely group prepares to turn Bebo around, AOL itself is in shambles. Executives are pleased to see the company’s shares increase almost 3 percent at the close of trading yesterday, but the tax implications of the deal further signal that AOL is an acquisition target.

Financial valuation and advisory specialist Shiva Badruswamy believes that the market for AOL is limited. Badruswamy said Google, Yahoo, and Microsoft are the only companies that would both be a fit for AOL’s assets and that have the cash to buy the company.

Google and Microsoft could find the tax benefits from an AOL acquisition especially attractive. The loss from the Bebo sale could offset some of the income generated by Google’s proprietary trading operation, which manages the Mountain View giant’s $26.5 in reserves. Microsoft has nearly $40 billion in cash and liquid investments that generate significant income. Yahoo has about $4.2 billion in reserves.

AOL will continue to downsize, Badruswamy predicted, selling off under-performing properties to strengthen its balance sheet and collect capital losses as it did with the Bebo sale. Private equity firms specializing in distressed assets are the most likely buyers, he said.