by Toffler

Toffler

Toffler

Facebook and Internet Companies in China

April 13, 2008, by TofflerN, category Business Climate, Entrepreneurship & Business, Uncategorized

As Facebook looks to its Chinese users to translate the site into Chinese, the expectation is that Facebook will soon enter the Chinese market. Facebook tried to enter China previously through acquisition of an existing Chinese social network but nothing came of the negotiations. Will Facebook have more luck this time? Or better yet, will Facebook be more successful than other overseas internet companies have had trying to enter China? (See below slide show) I think Facebook may have somewhat of an inside track with current overseas Chinese studying in universities who’ve already gotten onto Facebook. Maybe those users can help it ‘go viral’ in China. Facebook already seems to have developed a small user base among outward-looking, international business-oriented young people. I know many have sought to be my friend on Facebook, regardless of whether we’d met or not.

Perhaps the better question than whether Facebook can scale in China, is whether it can successfully monetize in China the way China’s own social networks have done. Facebook does not make much money on advertising currently. Chinese social networks, on the other hand, have different revenue models making them more profitable than any advertising-based model developed by Western-based social networks.

Another concern I have about Facebook offering a Chinese-language version is whether that will make it yet another target on the government’s internet block list. The Chinese government already blocks more Chinese-language sites that are sensitive than English-language sites, for example wikipedia.en is sometimes available but wikipedia.cn is never available within Mainland. Therefore, if Facebook is offered in Chinese, that makes it even easier and more accessible to Chinese users, including groups for or against T_bet independence, F_lun G_ng supporters, etc, as well as other sensitive information contained in pictures and videos on Facebook. My Facebook profile is already frustratingly blocked in China (for some unknown reason), I don’t know what all of us expat Facebook addicts would do with so much spare time we’d have if Facebook was totally blocked.

Slide show about the difficulties foreign internet companies have had in China by Jonathan Haagen (Economist Intelligence Unit)

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So, what do you think ?