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Wed, Apr 14, 2010 - Page 10 News List

China’s Tencent to buy into Russian Internet company

AFP , SHANGHAI AND LONDON

Chinese Internet portal Tencent Holdings (騰訊) said it will acquire a 10.26 percent stake in Digital Sky Technologies Ltd (DST), a Russian Internet investment firm and Facebook shareholder.

Tencent, best known for its popular instant messaging and online game platforms in China, said it will pay US$300 million for the stake in Digital Sky, which bought into US social-networking Web site Facebook last year.

However, the type of shares purchased will give Tencent only 0.51 percent of Digital Sky’s total voting power, according to a statement filed with the Hong Kong Stock Exchange late on Monday.

Tencent said it will “develop a long-term strategic partnership with Digital Sky and the companies in which it has invested” and “explore further business cooperation with them.”

In May last year, Digital Sky bought US$200 million worth of Facebook’s preferred stocks representing a 1.96 percent equity stake in the US firm. It also completed a tender offer to buy US$100 million of Facebook common stock in August.

“The investment allows us to benefit from the fast-growing Internet market in Russia, as well as to leverage our technical and operational know-how to strengthen the leadership position of DST,” Tencent president Martin Lau said in a separate statement.

Tencent, based in the southern Chinese export hub of Shenzhen, operates various online services, including instant messaging service QQ, Web portal QQ.com, games portal QQ Game, search engine soso.com and a mobile portal.

Separately, a British child protection agency said it had pressed Facebook to add “panic buttons” to its pages after the murder of a teenager was linked to the site.

Jim Gamble, CEO of the Child Exploitation and Online Protection Center, said the social networking giant did not agree to his demands outright at a meeting in Washington but he felt they were moving in the right direction.

Speaking after a four-hour meeting on Monday, Gamble said Facebook was close to “doing the right thing,” but urged the Web site to turn “words into action.”

The showdown came after controversy over Facebook’s refusal to include a “panic button” on its pages after the conviction of a serial rapist who used the site to lure and murder a teenage girl.

Peter Chapman posed as a young boy to lure 17-year-old Ashleigh Hall to her death in northeast Britain.

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