Chinese social networking site Renren.com has announced plans to acquire the entire stake in 56.com, a Chinese video website, for USD80 million in cash.

The transaction is expected to be completed in the fourth quarter of 2011. This is reportedly the first major strategic acquisition of Renren.com since the company was listed in the New York Stock Exchange in May 2011.

The transaction will reportedly not affect the current organizational structure of 56.com. In addition, Renren.com made a complete employee incentive program for 56.com to encourage these employees to stay in the company. At present, 56.com has about 200 employees. Of these staff, those working for the marketing, sales, and product teams of 56.com will be integrated with the corresponding teams of Renren.com after the transaction.

With this acquisition, 56.com will become a wholly-owned subsidiary of Renren.com. Zhou Juan, co-founder and chief executive officer of 56.com will join Renren.com's executive team as vice president. Zhou said they are glad to become members of Renren.com, whose large user base, successful experience, and various resources in the social networking, mobile Internet, and e-commerce sectors will enhance their attraction to users.

Chen Yizhou, chairman and chief executive officer of Renren.com, said the acquisition of 56.com will help meet more communication and sharing demands of users and help record and share their life on the Internet.

Over its six years' operation, 56.com gained total investments of USD30 million.

In May 2011, Renren.com launched IPO in the U.S. and gained USD743.4 million. The financed capital was used to strengthen the company's capacity and brand awareness as well as providing equity incentives to employees. The Chinese social networking site invested USD180 million in development and technology and another USD180 million in sales and marketing.