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Renren, China’s Facebook, sells shares on NYSE

But amid murky numbers and dubious accomplishments, is it really worth billions?

Renren’s exclusivity in China may not last for long, however. Last year, Mark Zuckerberg “vacationed” in the country, and in April 2011 rumors emerged that Facebook was in discussions with leading Chinese search engine Baidu. In response, Facebook released a statement indicating that "Facebook is currently studying and learning about China, as part of evaluating any possible approaches that could benefit our users, developers and advertisers."

Renren does have some other advantages. Its revenues come not just from advertising, but also from games and from “a Groupon-type service layered on top of the social network,” according to TechCrunch. Despite the slippery reporting, TechCrunch also credits Renren as having “Highly competitive management, [with] social network experience.” It says CEO Joe Chen, a Stanford MBA, has “a reputation as a formidable and experienced player and a savvy deal maker.”

Still, why the rush to invest in a relatively small, unprofitable Chinese social network, that hasn't yet reached the critical mass that is so important to social network success? Renren doesn't dominate the Chinese internet like Facebook does elsewhere, with its ubiquitious "Like" buttons and Facebook connect signup features.

Who’s to say that in a few years, Renren might not end up as desirable as MySpace or Orkut, out-competed by one of the other Chinese social networking sites, or crushed by a forthcoming Facebook-Baidu creation?

Part of the reason is that investors are hankering to get their hands on social network stocks. For better or worse, Renren beat everyone else to the market.

But there also appears to be an enthusiasm that may seem familiar to anyone who was around in 1998: Chinese internet stocks are white hot. If you’d invested $1000 in Baidu on Jan. 1, 2009, for example, you’d now have more than $10,000; the stock is up more than 40-fold since it first listed in 2005. Similarly, by investing in the December 2010 initial public offering of, China’s YouTube knock-off, you would have quadrupled your money in less than six months, even though Youku has lost $105 million since 2007.

But Baidu makes money, a handsome $4 billion in 2010, and it’s growing at a good clip. But that doesn’t mean other Chinese internet stocks will do the same.

Whatever happens to Renren, investors may want to keep a wary eye on the Winkelvoss twins, the strapping Harvard crew champs made famous by the movie The Social Network. The twins claim that Facebook founder Mark Zuckerberg stole their idea for the social networking site.

By many accounts, Renren is a Facebook clone. It launched in late 2005, just as Facebook was taking off on campuses across America. It originally called itself Xiaonei, which translates as "on campus network." Back then, it also featured the same trademark blue on its site.

The Winekelvosses extracted a settlement currently valued at $200 million from Zuckerberg. But that apparently isn’t enough. In April, they appealed for more. In the twisted logic of the privileged, if Renren ripped off Zuckerberg and Zuckerberg ripped off them, don’t they deserve some skin from the clone? As far-fetched as it sounds, wouldn’t the Winkelvi want to mine Renren as well?

Or maybe Zuckerberg deserves a piece of the action.