Reports that social networking site Bebo has hired an investment bank, Allen & Co, are fuelling rumours that the site is about to announce a big buy-out deal.

"A high level source" has told TechCrunch that Bebo has been in discussions with a number of potential buyers, and says that the company signed a deal on Monday to be acquired. The rumored price is $1 billion.

The speculative list of potential buyers is long, with some, Yahoo for example, said to have backed out early baulking at the high cost for the company - the second largest such site in the UK, after Facebook.

CBS, Viacom, Comcast, Google and Microsoft are all seen as strong potential buyers.