Reuters has posted that MySpace will be doubling their Chinese work force over the coming year. Considering they currently have 70 employees in China, doubling shouldn’t be too difficult. This news in conjunction with yesterday’s news about the MySpace gaming competition (which is limited to China, Japan, India and Korea), highlights the shifting battle for user attention.

While the U.S. may be close to social network market saturation, there remains to be massive growth opportunities abroad, especially in Asia. Facebook recently launched the Chinese version of their site (along with over 15 other languages). The launch of these languages are most definitely contributing to Facebook’s continued rapid global growth.

MySpace has experienced a substantial slowing of growth domestically and their shift to Asia highlights the new social network battleground. Both MySpace and Facebook face significant competition in China with companies like 51.com and Xiaonei both attracting millions of users and both with substantial war chests. Xiaonei recently raised $430 million and 51.com raised over $50 million as well.

Asian social networking will definitely be a hot area for people to keep their eyes on over the coming months as the battle heats up!

Giant Interactive Group Inc announced to that it would purchase a 25 percent stake in 51.com, the popular Chinese based social networking for $51 million dollars. How did they come up with a valuation? Not quite sure but the $51 million appears to be a symbolic number. This values 51.com at just over $200 million, a far cry from the $3-$4 billion that Facebook is estimated to be valued at currently.

Giant Interactive is a publicly based gaming company which has been struggling to acquire new users. This new acquisition will help boost their position and get them access to new online game users. Other investors in 51.com currently include Intel Capital, Sequoia Capital China, SIG and Redpoint Ventures. 51.com currently has over 120 million users compared to Facebook’s 70 million users.

This illustrates how large of an opportunity currently exists in China. The battle to become the dominant social network in China has been heating up. Less than two months ago, 51.com obtained another $50 million round of funding. Xianoei, a Facebook copycat raised a whopping $430 million back in May. 51.com’s low valuation may be based on their $44 million cash flow which Eric Eldon wrote about back in May.

With Facebook’s recent launch in China, it will be interesting to see how the social network landscape changes over the coming months. The large social networks are clearly stacking up their war chests positioning the market for an epic social networking battle abroad.

Last night Eric Eldon wrote about 51.com’s new $50 million round of funding. 51.com has 25 million active monthly users and intends to launch a developer platform similar to Facebook’s. As Eric Eldon points out, this is one of the first Chinese social networks that have publicly announced their intention to launch a platform.

At this point it has become standard for any large social network site to launch a platform. We are now on to the next phase where all social network sites make their information accessible to third-party sites. What is somewhat incredible about this is how the social network phases are now 12-months long and shortening rapidly.

So how much revenue is 51.com currently generating? According to Eric Eldon, they generated $44 million, “70 percent of which was from virtual goods.” Considering that only a small percentage of Facebook’s and MySpace’s revenue is currently generated from virtual goods, we either have a long way to go or alternatively domestic social network site users are not interested in virtual goods.

In China, virtual goods are a serious source of revenue for social network sites. 5 years ago when I was helping a local startup program a social network, the CEO was intent on generating revenue from virtual goods given his experience with South Korean social network sites. The bottom line is that Asian social network sites have been generating revenue since the early days via virtual goods.

This is emphasized in Eric Eldon’s statement that “the largest Chinese social networks are hesitant to open up too much to third parties because they want to make sure they’re the ones who make money from virtual goods.” Fortunately for the U.S. based social network sites, virtual goods haven’t been as substantial a revenue generator or we may not have been where we are today.

While I know little about 51.com, there is increasing buzz coming out of China and social networking. It appears that they have caught the social networking bug and now investors are throwing money at these websites. It will be interesting to see if these sites continue to follow behind the Silicon Valley startups or if they start to pave the path toward a more open social networking environment.