ChinaVenture is reporting that an unnamed venture investor in Chinese social network 51.com has confirmed a long-rumored investment by online game company Giant Interactive Group. Giant CEO Shi Yuzhu, who also successfully marketed the health tonic Nao bai jing (and in so doing subjected Chinese consumers to what by my lights are the most annoying television advertisements in recorded human history), took the Chinese online game company public last November on the New York Stock Exchange. The company operates titles ZT (Zhengtu) Online and Giant Online.

Urbane types in first-tier Chinese cities may turn up their noses at 51.com, but the social network is widely used in China’s hundreds of lower-tier cities, where Internet penetration is quickly increasing. The company was founded in August 2005 by Pang Shengdong, and received series A funding of $6 million from Sequoia and SIG China the following spring. Intel and Redpoint joined the two first-round investors in a $12 million series B.

The ChinaVenture piece cites a Sina Tech report quoting an “industry insider” who said bidding by other leading Internet companies to lead this third round was fierce, and that Giant won out not on the basis of price but on perceived synergies between SNS and online gaming that would help both companies to grow rapidly.

While the report doesn’t specify the total sum of Giant’s investment, in an earlier post I noted that company official Andy Yao Yonghe had said that the company was aiming to raise in the neighborhood of $50 million.  An industry insider buddy of mine confirmed that the round will be for $50 million at a pre-money valuation of $150, and said that the deal will be formally announced within the week.