Leading Dutch social network, Hyves, which for a long time held out against the encroachment of Facebook, is selling the entire company to Dutch media group TMG (Telegraaf Media Groep) for an undisclosed sum.

Hyves has a 68% penetration in the Netherlands, but lately we’ve been told that more and more people are talking about moving to Facebook.

Hyves was founded eight months after Facebook in 2004 by Raymond Spanjar, Koen Kam and Floris Rost van Tonningen. It has 10.6 million member accounts.

The move follows rumours of another European social network, Nasza Klasa in Poland, being put up for sale. Are Europe’s home-grown social startups finally cashing in their chips before the Facebook juggernaut rolls over their markets? Almost certainly. In the last few days we’ve also heard ‘European MySpace’ Netlog is aso having a tough time against Zuckerberg’s legions.