NORTHERN Light Venture Capital is to invest about US$5 million in Kaixin001.com, a social networking Website, industry sources said yesterday.

The move follows Microsoft's investment in Facebook and Rupert Murdoch's takeover of MySpace.

In the first round of the investment, Northern Light will take 18 to 20 percent of Kaixin's shares, according to insiders.

Kaixin is a new entrant to the Chinese social networking (SNS) market, debuting just a few months ago. But it has already attracted several million office workers through popular game applications as well as traditional features such as film reviews.

Kaixin declined to comment on the investment and Northern Light was not available for comment yesterday.

"Kaixin is the latest example of the next generation of SNS. Such Websites with strong interactivity have become popular since the end of last year," said Tan Bin, an analyst at CCID Consulting.

Besides Kaixin, Softbank has invested US$430 million in Xiaonei, China's biggest student SNS Website with 22 million users.

Giant, the game firm founded by Shi Yuzhu, also invested US$51 million in Shanghai-based Website 51.com in July.

MySpace and Facebook have both launched local versions of their Websites in China.

The Chinese SNS user base has grown phenomenally over the years. In 2006, the user base was 61 million.

It is expected to hit 110 million this year and 180 million by 2010, according to Shanghai-based Internet consulting firm iResearch.