French business networking site ViaDeo has acquired ApnaCircle, a Sabeer Bhatia venture, in an all stock deal. The deal is cashless and the exisiting investors will get stake in Viadeo, ApnaCircle’s co-founder Yogesh Bansal has told VCCircle.

What could have compelled such an equity-affecting move? Was it insecurity in the wake of recession or could it be a distress sale to the bigger fish?

ViaDeo has over 6.5 million members while ApnaCircle has over 3 lakh registered. According to the release, ApnaCircle brand will be retained and it will aim at having 1 million users by 2010. There are no details on how the two firms plan to reach this milestone. In a market dominated by LinkedIn, what is ApnaCircle’s strategy to draw in users? The site has low brand recall and may have to either direct itself into offering a niche service or pump up its marketing act to grab attention. The release calls ApnaCircle.com “India’s number one social & professional networking website” – but the truth is the site lags far behind competitor LinkedIn and InfoEdge’s Brijj is also vying for marketshare.

ApnaCircle was launched by entrepreneur Yogesh Bansal and Sabeer Bhatia in 2007 and is run from an incubation centre at Amity University. Bhatia will continue to remain director of the social networking site.

Bhatia’s other dotcom investments include Arzoo, Instacoll, Sabsebolo, Yousalary and LayoffGossip. He started Blogeverywhere with co-founders Shiraz Kanga and Viraf Zack and has also invested in network security firm NeoAccel.

Viadeo is bullishly expanding its reach internationally – it acquired Tianji in China in 2006 and set up a subsidiary in Mexico last year to enter Brazil and Russia. Viadeo claims to draw 7700 new members every day, and connects over 20,000 people.