There’s a rumor that British Telecom made a $550 million offer to buy Bebo, the social networking company that is trying to catch MySpace, but that BT was rejected. Both sides, however, say there is no truth to it. That’s pretty strong. Usually, if there is some truth to a story, both sides just shut up. So keep in mind there’s a lot of hype right now, a lot of efforts to create buzz to generate a sale, or perhaps investment bankers in search of business, with an incentive to float rumors and put a company into play. As we noted, the days of the upward right traffic trajectories may be coming to an end.

Perhaps the rumor is true. But Sarah Gavin, communications director for told us: I can confirm that BT has not approached us and we currently have no contact with anyone at BT. We have no idea where this rumour came from.

BT has also said there’s nothing to it: We can state categorically that BT has not had any discussions with, or made any approach to, Bebo. We’re not sure where this rumour came from according to eConsultancy.