The Stardoll Network formed

Stardoll acquires Piczo, forming the Stardoll Network, entertainment targeted at teenagers

Stardoll, an entertainment site for young women, has acquired Piczo, an online destination which allows users to build their own websites.  The financial terms have not yet been disclosed. 

Both companies have raised millions in VC funding.  Stardoll, based out of Sweden, has raised around $9 million in VC funding from Sequoia Capital and Index Ventures.  Piczo, based out of San Francisco, has raised around $19 million from Catamount Ventures, Mangrove Capital Partners, Sierra Ventures and U.S. Venture Partners. 

Stardoll and Piczo are both targeted at the teenager demographic.  While Stardoll is definitely aimed more at young women, both sites offer social networking elements which allow users to express themselves. 

Stardoll, is a free site that allows young girls to customize and dress up virtual paper dolls.  They can either pick from celebrities like Paris Hilton and Avril Lavigne, or customize their own unique avatar.  Currently Stardoll has 27 million members.  Although free to sign up, users can pay for Stardoll currency to buy more clothes and decorations for their avatars.

With Piczo, users can create their own custom web pages.  Most of the featured pages have the feel of a MySpace profile page, that being one main page with music, all sorts of photos, and links.  Piczo was founded in 2004 and has 30 million registered users. 

Along with the acquisition of Piczo, Stardoll will be merging its site Paper Doll Heaven, a site similar to Stardoll, to the merger.  Stardoll, Piczo and Paper Doll Heaven will form the Stardoll Network in hopes of providing a place for Piczo to grow and add more value proposition for potential advertisers.