UPDATE 1-China's 51.com targets IPO after 3 yrs, eyes Nasdaq

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By Sophie Taylor and Jason Guo

SHANGHAI, May 10 (Reuters) - Chinese social networking Web site 51.com is targeting a listing of its shares after three years' time, with the U.S. tech-heavy Nasdaq .IXIC as its first choice, the company's chief executive said on Thursday.

Chinese social networking sites -- the most well-known among them 51.com, Tudou.com and Rox.com.cn -- have benefited from a wave of foreign venture capital which has poured into the world's second-largest Web market following Google Inc.'s (GOOG.O) purchase of YouTube last year.

51.com (www.51.com) has also received around $10 million in second-round venture capital funding from heavyweights Intel Capital, Redpoint Ventures and Sequoia Capital China, and is targeting an eventual listing, Pang Shengdong told Reuters in an interview. "Our target would be after three years, and the Nasdaq would be our first choice, since we are most familiar with it," he said.

The company expects to break even in the third quarter of this year and make a profit of a few million yuan in the fourth quarter, on the back of strong advertising revenues, Pang said.

Social networks such as MySpace and Facebook let users share pictures, music, videos and blogs, and have been mostly popularised by teenagers.

WHOSE FRIENDS?

51.com, with around 60 million registered accounts, was not perturbed by News Corp.'s NWSa.N China launch of its popular MySpace service last month, Pang added.

"I'm not worried about them right now. When they have more users, I'll worry," he said, referring to local media reports that MySpace had garnered about 30,000 users in its first month.

51.com is growing by about 5 million accounts per month and hopes to add another 30 or so employees to its current headcount of 140, Pang said.

MySpace also faces stiff competition from entrenched local portals including Sina Corp. (SINA.O) and Sohu (SOHU.O), which take up a large share of the market.

Analysts -- who estimate that China's Web surfers spend a combined 2 billion hours a week online amid a rapidly growing online advertising market -- have said MySpace would face a difficult challenge localising its content to draw in users.