Just as investors are finding that the online social networking business model in China is doomed, another lemming, Tano Capital LLC, has taken the plunge by investing USD2.2 into TongXue.com.

TongXue.com was started in 2006 as a community website for Chinese students studying in the United States. It opened its Beijing office in 2007 and currently claims to have more than 10 million registered members.

Tano China Private Equity Fund I participated with a consortium of venture capital investors in investing USD6 million through the purchase of equity interests. Funds raised will be used primarily for product innovation and brand promotion.

UUZone.com, one of the first social networking service websites in China, closed this month after failing to find ways to generate income. As one of the first batch of Chinese SNS websites, UUZone.com once gained over USD1 million investment from the venture capital firm Morningside Ventures. And South Korea's largest social networking website Cyworld announced its decision to withdraw from the Taiwanese market two months ago over fears that revenue is difficult to come by for companies embroiled in the over-exposed SNS sector.

Tano Capital is an alternative asset management firm founded by Charles "Chuck" Johnson, formerly co-president of FranklinTempleton Investments and CEO of Templeton Worldwide. Tano Capital makes private equity investments into rapidly growing private companies in India and China.