DigiTrends Your source for Chinese digital insights

Facebook In China: The Future Is Still Unclear

     China's social networking service (SNS) market size has exceeded RMB 1 billion in 2010, having grown more than 200% compared with 2009. Astonishingly, the figure is expected to double again in 2011.

      It is no wonder that soon after Facebook CEO Mark Zuckerberg was selected by Time magazine as Person of the Year 2010, he set off to China to meet with the top management of Baidu Inc., China Mobile Ltd., Sina Corporation and Alibaba.com Ltd. By contrast, he did not hold talks with the management teams of archrivals such as Tencent Holdings Limited, Kaixin001.com, Renren.com and 51.com.s

     Although the details of his China trip were kept strictly confidential, Facebook certainly cannot afford to leave the Chinese market unattended. Strangely, despite a new sales office in Hong Kong, Facebook says it currently has no plans for China. Is that true? We highly doubt so. Like Zuckerberg previously said “how can you connect the world without connecting 1.3 billion people in China?”  We are sure Facebook has plans for China but it isn’t ready to release its strategy.

     China counts as an exciting but potentially hazardous market for Facebook. With the world's largest Internet population, China has already proved to be a Waterloo for many big US Internet companies, such as eBay and MySpace. Money and technology are no guarantee of victory here.

     If Facebook officially enters the Chinese market, it can choose either to work alone or with a well-connected local partner? The first option is not likely to be successful. And Zuckerberg himself seems to be aware of this.

      Facebook’s main competitors in the Chinese market are so-called Facebook clones that have been here for years, one of the most dominant being RenRen. RenRen has 170 million registered users at the end of 2010, largely due to significant localization of the site to Chinese tastes, something it might be difficult for a multinational brand like Facebook to do.

     Besides fierce local competition, Facebook will encounter another serious challenge here: censorship. China’s social networks ( RenRen, Kaixin001, etc.) employ long ban lists of sensitive terms (both political and pornographic) and warehouses full of manual censors (who click through images and videos for sensitive content all day long). All “cooperate” with government requests. Consequently, we can foresee the articles, “NYT Interview with One of Facebook’s 1000 Censors in China” and “The 50,000+ Terms That Facebook Blocks You from Sharing with your Chinese Friends.”

     Facebook does censor in other nations (e.g, Germany (Nazis) and Pakistan (images of the prophet)), but limited to a few extreme cases. And which Western internet service with user-generated content has succeeded in appeasing the Chinese government anyway? Google’s content is far less sensitive and even that went too far for them.

     Zuckerberg is in China. An R&D office is conceivable. Facebook China? Not so clear.