With the success of MySpace and Facebook, venture capitalists are ramping up investments in the social networking space. One of the latest deals is a $20 million round for hi5. The lead investor is Mohr Davidow Ventures.

Hi5 has more than 60 million registered users and has a strong presence in global markets, including Latin America and parts of Eastern Europe.

To get some perspective on things, I interviewed Robb Hecht, who is an expert on social networking and operates IMC Strategy Lab. According to him: "If you were an investor and wanted to get in the game on the most international social network, you'd currently invest in Hi5 (not MySpace or Facebook).

"Hi5's not much of a hit in the U.S., but with a fourth the number of users of MySpace and almost twice as many users as Facebook, the site is both gaining deserved attention and funding.

"The fact that Hi5 apparently doesn't have a publicity machine behind it, which makes it a lesser-known brand compared to Facebook or MySpace, goes to prove that the power of Word-of-Mouth marketing has driven this site's popularity (and online social networking in general). But, Hi5's keen ablitity to acquire users globally can probably also rest on the fact that the company defined itself early on as a 'international social network.' Their method was to regionalize by various languages more effectively than other competitor sites.

"The importance of Hi5's funding? If Microsoft (NASDAQ: MSFT), Yahoo! (NASDAQ: YHOO) or Google (NASDAQ: GOOG) want to attempt a large scale international consolidation and further their global online brands to engage users, Hi5 would and should be a target -- something Hi5's backers must be hoping for."

For more recent venture capital fund deals, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.