Chinese networking service plans IPO

Renren.com, China’s largest social- networking service, is preparing for a US initial public offering of about $500 million this year, according to three people with knowledge of the plan.

The banks handling the IPO are Morgan Stanley, Deutsche Bank AG and Credit Suisse Group AG and the offering could come by June.

Renren.com has more than 160 million registered users, according to Analysys International in Beijing. The site could use the IPO proceeds to woo more visitors as it competes with local rivals Tencent Holdings Ltd and Baidu Inc in the world’s most populous Internet market. Renren — a name that means “everyone” in Chinese — has similar features as Facebook Inc, which is blocked in China.

No US social-networking sites have gone public, even as their popularity and advertising revenue soar. That’s created pent-up demand among investors. LinkedIn Corp, which announced plans last month to raise $175 million in an IPO, could become the first to go public. At Renren, advertising has more than doubled each year since the site started selling space in 2008, Donna Li, general manager of strategic marketing and media planning at the company, said earlier this month. The online advertising market will triple to almost $13 billion in China by 2014, estimates Susquehanna International Group LLP.