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Facebook look to acquire Chinese social network Zhanzuo for $85 million

Rachel Hawkes (Social Media Portal) - 19 November 2007

Facebook has reportedly made an offer of $85 million USD to buy Zhanzuo (http://www.zhanzuo.com), one of China's biggest online communities.  Zhanzuo is home to over seven million Chinese people; that equates to about one in every 180 Chinese using the site.  Facebook reportedly has over 100,000 users already however the purchase of an already established network such as Zhanzuo would enable Facebook to have a strong presence in the worlds two biggest internet markets; China and the United States.
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According to The Times, Zhanzuo's chief executive Jack Zhang and the brains behind Facebook Mark Zuckerberg have been in talks, but no deal has yet been signed - although the end of November was hinted at.

Facebook recently acquired a Chinese domain, facebook.cn which fuelled rumours that they were soon to make their entry in the controversy-ridden country.  Entering this market will carry risks, as the Chinese government heavily monitor and restrict the Internet.

Just over twelve months ago, Xiaonei.com a Chinese Facebook copy aimed at the college student was purchased for an undisclosed sum. It was acquired by Oak Pacific Interactive (OPI) and merged it with their own college community site 5Q; taking their combined user base to over one million.  Xiaonei will be Facebook's biggest competitor in this region.

In being slow to capitalise on its success and international appeal by establishing Facebook in other languages, in addition to Xianoei they have been 'cloned' by sites like Vkontakte in Russia, StudiVZ in Germany (who were bought early 2007 for 100 million), DesiMartini from India and StudentFace in Australia.  There are many others.

Xiaonei and StudiVZ have been acquired for much more money than Facebook is offering Zhanzuo (who's user base is bigger than the two sites combined).  Interestingly Facebook themselves were looking to be acquired for $1 billion USD before their site was opened up to the mass public (and therefore their subscriber number was substantially less than it currently is).

Facebook's biggest competitor MySpace launched a Chinese language version of their site in April of this year.



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