When I saw this brilliant Dilbert cartoon , I had to laugh.

According to Dogbert -- Dilbert's pet and canine nemesis -- all companies can be grouped into three categories: 

  1. China
  2. Facebook
  3. Irrelevant

To me -- a financial journalist -- this perfectly sums up the media's obsession with the Next Big Thing. Thus, any company that falls into the first two categories is bound to be a sure-fire winner for investors, agreed?

We'll find out for sure later this year, when Chinese social-networking site Renren floats its shares (most likely on the NASDAQ stock market).

China's Facebook
One big problem for investors is that all of the world's leading social-networking websites, including market leader Facebook, are privately owned. Thus, investors keen to profit from this online miracle cannot benefit financially from the growth in social networking.

According to media reports, Renren has already appointed three investment banks -- Credit SuisseDeutsche Bank, and Morgan Stanley -- to manage its initial public offering (IPO).

Thus, with the $500 million float of Renren (Chinese for "everyone"), investors will not only be able to see how Mr. Market values social networking sites, but also will be able to buy into both big growth stories of the Noughties.

BIG numbers
It's hardly surprising that financial pundits and analysts practically start foaming at the mouth when they discuss China's Internet wonder.

According to the state-run China Internet Network Information Center, in mid-2010, the People's Republic had 420 million Internet users, of which 364 million had broadband connections. Today, China probably has close to half a billion users, versus the total U.S. population of 310 million.

As for Renren itself, it is a year older than Facebook, having been formed as Xiaonei ("inside school") in 2005. Sold in 2006 to privately owned fund group Oak Pacific Interactive, it later changed its name to Renren. 

Today, Renren has 160 million users (versus at least 550 million on Facebook) and is 40%-owned by Japanese telecom giant Softbank.

Bubble 2.0?
Given the media's ongoing obsession with both China and Facebook (which is banned in China), gushing media coverage could provide an immediate boost to Renren's share price post-IPO.

However, veteran investors will greet this investment fervor with a sigh, remembering all too well the "new paradigm" that led to the dot-com boom and bust more than a decade ago.

That said, if you're still kicking yourself for not buying into Google when it floated at $85 a share in August 2004 (it's now $610), then you may decide to cast an eye over Renren's prospectus.

On the other hand, even the mighty Google has struggled in China, after following foul of the republic's Communist Politburo. Today, its Chinese rival Baidu (Nasdaq: BIDU) has a 70%+ share of the search market in the Middle Kingdom. In the past five years, Baidu's NASDAQ-listed shares have soared more than 2,300%!

What's more, despite its modernizing drive, China's history of state-sponsored seizures of private property, clampdowns on free speech, and other human-rights abuses makes me nervous.

Hence, unless Renren's fundamentals are too tempting to turn down, I'll probably give its IPO the thumbs-down.

Cliff D'Arcy doesn't own shares of any companies mentioned. Google is a Motley Fool Inside Value recommendation. Baidu and Google are Motley Fool Rule Breakers selections. The Fool owns shares of Google. The Motley Fool has a disclosure policy.