Renren Inc., one of the largest real-name social networking services in China that listed in NYSE (RENN) couple months ago announced buying video site 56.com for $ 80 million in cash. After the acquisition, which is expected to be completed in the fourth quarter of 2011, 56.com will become a wholly-owned subsidiary of Renren.

Founded in 2005 by NetEase veteran Zhou Juan, 56.com now stands alone among Chinese video sites that whipped themselves into a state of frenzy to bleed money for copyrighted contents as evidenced by 1000 Times increase in quality video costs compared to 5 years ago.

Maybe that’s one of the main causes why Renren snagged up 56.com. Joe Chen, Chairman and Chief Exec of Renren commented that user uploaded videos have been increasingly popular amongst SNS users as an extensions of communication and content sharing. Acquiring 56.com will help Renren further meet user needs of sharing their lives through video. He believes that 56.com’s consistent focus on providing video sharing services versus professional content has resulted in a strong following of UGC-centric users, which complements Renren user’s social behavior.

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Ben Jiang

Listener of startups, writer on tech. Maker of things, dreamer by choice.