Why Facebook Won't Win in China
If the rumors are true, Facebook is planning to enter China's social-media market through a partnership with the local search giant Baidu.
Facebook will face strong local competition and the same regulatory and political pressures that defeated other Western internet giants like Google, Yahoo, eBay, Amazon and Twitter, according to industry experts who appeared on this week's episode of Thoughtful China, a video program produced in Shanghai.
China already has "social-media properties providing value in a very fragmented social media landscape, so I'm just not sure what compelling value Facebook can provide in a meaningful way," said Sam Flemming, founder and chairman of CIC. "To become literally the Facebook of China is not going to be easy in a market that's already very social."
In addition, Facebook may have waited too long, warned James Lee, a global media analyst at CLSA. "When you have a hyper-competitive space, you need to be there on day one."
China's appeal is understandable. The country is home to the world's largest internet market and it has a vibrant social-media scene, with successful social-media sites such as RenRen, Kaixin001, Qzone and 51.com, Tencent's QQ instant-messenger platform and Sina's red-hot microblogging service Weibo.
Chinese media analysts also question whether Facebook has picked the best suitor in Baidu.
"There is a natural relationship between search and social," said T.R. Harrington, founder and CEO of Shanghai-based Darwin Marketing and a search-marketing specialist. But Baidu is not necessarily the best choice for Facebook to enter the Chinese market. "It would make a lot more sense to work with someone like Sina's Weibo [or] Tencent," established companies that understand China's social-media market.
Thoughtful China is produced by Normandy Madden, senior VP-content development, Asia/Pacific, at Thoughtful Media Group and Ad Age's former Asia editor. See earlier episodes of Thoughtful China here.