China’s leading real-name social networking Internet platform Renren is to acquire 100 per cent of 56.com, a leading user generated content (UGC) online video sharing site in China in a $80 million cash deal. The acquisition is expected to be completed in the fourth quarter of 2011, subject to customary closing conditions.
Founded in 2005, 56.com is a leading online video-sharing site where users can upload, view and share videos. A majority of the videos offered on the site is created by users, consisting of content mix from performing artists, amateur groups, and video enthusiasts.
“UGC videos have been increasingly popular amongst SNS users as natural extensions of communication and content sharing. The acquisition of 56.com will help Renren further meet user needs of recording and sharing their lives through video format on our social network,” commented Joseph Chen, Chairman and Chief Executive Officer of Renren. ”
He said that 56.com’s consistent focus on providing video sharing services versus professional content had resulted in a strong following of UGC-centric users, which complemented Renren users’ social behaviour. “We expect that the synergies and cross marketing opportunities between 56.com and Renren.com communities will further drive growth in user engagement, traffic, and advertising solutions to clients,” he predicted.
Renren’s platform includes the main social networking website Renren.com, the online games center game.Renren.com, and the social commerce website Nuomi.com. Renren had approximately 124.2 million activated users as of June 30, 2011.