StudiVZ later issued a statement saying it did not pass on information about users to third parties.

Founder Dariani has come under attack himself for a party invitation on a website modeled after the Voelkischer Beobachter, a notorious Nazi propaganda newspaper. Dariani said it was meant to be a Nazi satire and later apologized.

StudiVZ also made headlines with a case of mass cyberstalking and users complaining about security leaks. The site was forced to reset members' passwords after hackers cracked the system.

German publisher Holtzbrinck Verlag -- which owns Macmillan books, Scientific American and a stable of newspapers including Die Zeit -- is convinced of studiVZ's potential.

Last year, its Holtzbrinck venture arm bought studiVZ for a reported 80 million euros.

But German Internet entrepreneur Alexander Samwer, who with his two brothers is best known for founding the Crazy Frog ringtone company Jamba that was later bought by News Corp., is placing his bets on Facebook.

"Facebook is light years ahead of studiVZ," Samwer told Spiegel magazine in an interview.

In January, the Samwer brothers invested in Facebook after selling their stake in studiVZ last year.

(Editing by Richard Hubbard)

via  reuters