Social Network Tagged Acquires hi5

Tagged Inc, a San Francisco-based social networking service, has acquired social game network hi5 for an undisclosed deal value.

On the face of it, the move makes sense. Join hands with other peer group firms rather than toiling hard to add the next bunch of users. Afterall, Tagged's active user base is expected to rise two fold to around 20 million a month, while the number of registered users will more than triple to 330 million.

Given that just about one in ten Tagged users also happen to be a hi5 user, the deal would not end up creating a dud with lot of overlapping users.

Incidentally, post-acquisition, Tagged plans to leave hi5′s website up and running, allowing users to enter the Tagged site through hi5′s domain. So it's not a buy and kill strategy either, atleast to begin with.

Just about three years ago when the social networking sites exploded, hi5 was one of the top three social networks (though still behind MySpace and Facebook. But once Facebook pressed on the accelerator it hi5 kind of floundered. In February, it had acquired the social game developer Big Six, with the strategy that hi5 will reinvent itself as a social gaming company.

Founded in 2004, Tagged has had a better history. It has been hiring and also acquired another social networking client Digsby, and, more recently, snapped the machine learning company Topicmarks.

Though, Tagged has a fairly small presence in the USA, it has gained good traction in Southeast Asia, South America as well as some European countries like Spain, Portugal and Romania.

Unlike Facebook, which is focused on connecting people who know each other, Tagged is designed to be a network for meeting new people through games, gifts, browsing features and a lot more. It would hope with new users entering from hi5 deal, it can stand on its own as social networking moves to the next level.