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Does LinkedIn Have a Chance in China?

Clones Abound, But U.S. Networking Site May Push Deeper Into the Market

By Published on . 2

LinkedIn competitors, including Tianji, abound in China.
LinkedIn competitors, including Tianji, abound in China.

This week, LinkedIn announced that its desktop site is now available in Thai. It also comes in Tagalog, Bahasa Indonesia and Bahasa Malaysia, not to mention Czech and Romanian.

Chinese isn't on the list. Why? As usual when it comes to foreign tech companies and China, it's complicated.

LinkedIn has said for years that it's studying China, where clones of the professional networking site abound, some echoing the Mountain View, Ca.-based company's blue-and-white logo.

But the many imitators are fighting among themselves for market share, and the original might just see an opening in a country where most foreign social media giants are blocked.

BMO Capital Markets said in a research note this month that an MDC Partners agency had been hired to do public relations outreach for LinkedIn in China. (LinkedIn declined to comment on its China plans, and MDC did not respond to emails.) The note, which predicted a "formal launch" in China in 2014, caused LinkedIn's share price to jump a few percentage points.

But "launch" might be the wrong term – LinkedIn has already been easing into China without fanfare or much apparent effort.

It already has 4 million members in China, about the same number as in Australia. Many are Western-educated professionals or employees of multinationals – prime targets for headhunters -- who use the English-language site.

Though it's less well-known, LinkedIn does offer mobile and iPad apps in Chinese. Prioritizing mobile above desktop could be smart, since 4 out of 5 of China's 591 million Internet users go online through smartphones, according to the China Internet Network Information Center.

And it would fit with LinkedIn's expansion across the Asia Pacific region, where it has more than 46 million members, up from about 18 million two-and-a-half years ago.

But foreign social media has had it rough in China. The government blocks Twitter, Facebook and YouTube -- even Google Drive and LinkedIn-owned SlideShare aren't accessible unless you use a virtual private network to bypass the firewall.

Authorities apparently don't perceive LinkedIn as a threat, though they did shut down access for one day in 2011 around the time a shadowy online group was urging pro-democracy protests.

"People on LinkedIn talk about their professional life, their work, news about their industries, it's not that sensitive," said Xiaofeng Wang, a Forrester Research analyst who thinks LinkedIn has potential in China.

The big question is what kind of China-specific content it could offer to rise above competitors. To attract advertising, now representing about a quarter of its revenue, LinkedIn has been transforming itself into a content-rich media site where business luminaries dispense career advice.

If LinkedIn is prepared to invest in content in China, it could make the site attractive.

"LinkedIn is a place where professionals can discuss issues, trends, other things like that, and China doesn't have a very good website with this service," said Will Tao, Beijing-based analysis director at China's iResearch.

Though analysts say that none of the LinkedIn competitors is a breakout success, fighting for market share will be tough. Tianji, a Chinese networking site owned by France's Viadeo, says it has 15 million users. One of its attractions is a Myers-Briggs-type personality test with a twist – people can invite friends and colleagues to evaluate them too to get a more accurate reading, said He Miao, marketing director.

Another feature ranks users based on experience, connections, education and influence, so you can see who's getting ahead faster than you.

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