From Reuters:

Google reveals stake in Chinese social Web site

Google revealed on Monday that it had acquired a stake in Chinese community Web site Tianya.cn, indicating a foray by the global search leader into social networking in the world's second-largest Internet market.

A Google spokeswoman confirmed the stake holding by email, but declined to give further details.

Various local media reports on Monday put the estimated size of Google's stake at anywhere from less than 10 percent to up to 60 percent. Other media reports have said Google may be eyeing acquisitions in China.

It's a smart move: Tianya has been doing Web 2.0 in China since before the term was coined.

Google and Tianya have already rolled out a service called Wenda, an equivalent to Baidu Knows (百度知道), which allows users to ask questions that other people in the user community can answer. China Web 2.0 Review tried the service and found several features he liked.

Billsdue — probably the savviest blogger out there writing about China tech stocks — had this to say:

Google appears to be using Tianya's registration system, which gives them at least two benefits:

1. seamless access to Tianya's 20m+ registered users;
2. deniability of evil when the Chinese government requests user info, since technically the info is held not by Google but by Tianya.

In addition to being very popular, Tianya has been the main distribution point for some prominent cases of citizen journalism, such as the letter that exposed slavery in a Shanxi brick kiln (see ESWN), and the post about the pollution on lake Tai (see Danwei).

See also this entry on Moon Blog, an English blog by a thoughtful Chinese IT guy: Google Answers Censorship In China.