AOL reviewing assets, but will likely keep Bebo

The building housing the corporate headquarters of AOL can be seen in New York May 28, 2009.

SUN VALLEY, Idaho (Reuters) - AOL, which is in the process of being spun off from Time Warner Inc (TWX.N), is reviewing assets it could sell or divest, but will likely keep its social networking site Bebo, CEO Tim Armstrong said.

Armstrong told Reuters on Thursday that Bebo still has "great value" and that it will be moved to a Ventures unit of the online company so that work can be done to improve the site. The move has raised speculation that AOL may want to sell Bebo, which has lagged in popularity behind other social media sites like Facebook and Twitter.

Speaking on the sidelines of the Sun Valley media and technology conference in Idaho, Armstrong said some other AOL assets are under review for possible sale or divestiture, but declined to give specifics.

The former Google Inc (GOOG.O) executive was appointed in March and is conducting a 100-day review of AOL operations. He is expected to present his strategy later this month.

AOL, whose properties include celebrity news website TMZ and the AIM messaging service, relies heavily on advertising revenue and has struggled with the decline of its Internet access business. Its share of the U.S. search market has dropped from nearly 12 percent three years ago to about 4 percent.

There are still many questions about how the business will maneuver through the advertising recession after it splits from Time Warner around the end of this year.

"More than any other player this year, everyone wants to know where they go from here post-Time Warner," said Standard & Poor's analyst Tuna Amobi.

(Reporting by Robert MacMillan, Writing by Tiffany Wu; Editing by Phil Berlowitz)