Chinese social networking site Renren has entered an agreement to acquire 56.com, a video-sharing service in China, for $80 million in cash. The acquisition is expected to be complete by the fourth quarter of 2011.

Similar to YouTube, 56.com allows users to upload, view and share videos. The service, which was founded in 2005, features performing artists, amateur groups and video enthusiasts. Most of the content is user generated.

Renren will use the acquisition to help increase their video recording and sharing options in order to help users share even more aspects of their lives. Renren believes that this acquisition will help increase traffic and user engagement as well as present new advertising opportunities for both parties.

Joseph Chen, Chairman and CEO of Renren, spoke about the acquisition. He said:

UGC videos have been increasingly popular amongst SNS users as natural extensions of communication and content sharing. The acquisition of 56.com will help Renren further meet user needs of recording and sharing their lives through video format on our social network. 56.com’s consistent focus on providing video sharing services versus professional content has resulted in a strong following of UGC-centric users, which complements our user’s social behavior. We expect that the synergies and cross marketing opportunities between 56.com and Renren.com communities will further drive growth in user engagement, traffic, and advertising solutions to clients.

As part of the acquisition, Juan Zhou, 56.com’s co-founder and CEO will join Renren’s management team as vice president.

Coming off of their April IPO which raised $743.4 million, Renren has worked with a number of different companies. The service partnered with MSN in August to create a universal login that would allow users to cross-post content easily. The company also teamed up with China Merchants Bank to launch a social credit card with location-based features earlier in the summer.