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Facebook’s Leftovers? Social Network Tagged Acquires hi5

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Social networking service Tagged, Inc. announced it has acquired the social game network hi5 today, doubling Tagged’s monthly active users to 20 million. The combination will also increase the total number of registered users to 330 million, up from 100 million.

According to The WSJ’s report, the deal’s terms were not disclosed, but include the hi5 website and user base.

Hi5 used to be among the top three social networks in 2008, behind MySpace and Facebook, but suffered as Facebook began to move into international markets. Since then, hi5 has tried to remain competitive by reinventing itself as a social gaming company. In February of 2010, it acquired the social game developer Big Six, whose platform was to become a part of the hi5 network. Earlier in the year, the company suffered from layoffs and also hired a new CEO, Bill Gossman.

With the focus on gaming, hi5 closed an additional round of funding in July 2010, raising $14 million. The round, led by Crosslink Capital, brought the social network’s funding to over $34 million. It also appeared to include the $3 million in debt funding raised from Mohr Davidow in April 2010.

Sadly, it was all for naught. By September, the company confirmed “significant layoffs” where 29 people (19 FT) were let go.

Tagged, meanwhile, has been growing. In January, it doubled staff and gave out raises, acquired social networking client Digsby in the spring, and, more recently, acquired the machine learning company Topicmarks.

Tagged has a small U.S. presence, with about 30% of its user base located here. But the network is popular in Southeast Asia, South America as well as in some European countries like Spain, Portugal and Romania. Only 10% of its user base overlaps with hi5, which is what made the deal appealing. Post-acquisition, Tagged will leave hi5’s website up and running, allowing users to enter the Tagged site through hi5’s domain.

Tagged’s revenue was $33 million in 2010, and CEO Greg Tseng told the WSJ he expects it to be between $43 million and $45 million in 2011. Unlike Facebook, which is focused on connecting people who know each other, San Francisco-based Tagged is designed to be a network for meeting new people through games, gifts, browsing features and more.