Facebook Offers $85 Million To Acquire Chinese Social Networking Site Zhanzuo.com

zhanzuo.jpgFacebook is said to have offered $85 million to acquire Zhanzuo.com, a Chinese social networking site with seven million users.

According to The Times, Jack Zhang, Zhanzuo’s chief executive, and Mark Zuckerberg have been discussing the deal but it has not been accepted yet, with a spokesperson saying that the result of the talks will be disclosed towards the end of the month.

The acquisition would give Facebook a base from which it can tap into the growth in what will soon be the worlds largest online marketplace by user numbers.

Zhanzuo ranks in the Top 250 sites in China according to Alexa, but strangely both Alexa and Compete show a big drop in traffic for the site over July and August. Although Alexa may not be the most accurate metrics source, the massive drop for the site at once might suggest issues with governmental blocking; the site primarily operates on a .com domain as opposed to a .cn (.com’s are more regularly blocked or redirected), and there is no other logical explanation for the massive and immediate drop in traffic. I’d suspect that the site may find it has more problems in the future should it end up owned by Facebook.

Zhanzuo was funded by Sequoia China and Morningside Capital.

Update: as pointed out in the comments, the traffic dip might be related to users heading back to school…that’s one big dip, but I’m willing to accept it as an explanation. Certainly other Chinese companies operate on .com’s without problem, although it would be interesting to see how a social network such as Zhanzuo.com deals with censorship, particularly with 7 million users. Given the previous heated debate over Yahoo and China, it will be even more interesting again to see how Facebook deals with it if the takeover is successful.

Update 2: Facebook is flat out denying this. From Brandee Barker, Facebook’s Director of Communications: “No offer has been made and no acquisition in China is being considered by Facebook. And I don’t know who the spokeperson is that they are referring to in the story. The Times never contacted me or my team to confirm the accuracy of this story.”