Launching in China? Dream on Facebook

The debate over whether Facebook is set to launch in China has sparked off again this week as the social networking giant launches its IPO bid. To be honest it’s all headline grabbing claptrap which adds nothing new to the arguments that were made at the time the IPO filing was first made.

The most remarkable story came from state-run rag the China Daily, which, without a hint of irony, wondered out loud “Is China Facebook’s next step?” without once mentioning the fact the site is BANNED there.

Back when the IPO filing was first made with the SEC, I commented that it was obvious Facebook wants to appeal to potential investors and show it is considering expansion into the biggest web market in the world. Of course it would want to do this, especially as growth rates in other regions are slowing, but whether or not it can enter China is  completely out of its hands.

It won’t happen for several reasons:

• Facebook is blocked in China and would have to literally bend over backwards to accommodate the kind of rigorous censorship demanded of China’s home grown social media – the media backlash and damage to its reputation would hurt too much I imagine, to make this even a possibility.
• Even if it was prepared to censor content – and potentially bin parts of the platform deemed unsuitable – there’s no inclination the Chinese government would even want it in the PRC. Its Chinese rivals are doing just fine over there thanks very much.
• Similar to the above point, is there any suggestion Chinese users would take to the platform? Alright, around 500,000 are said to be accessing it from China with VPNs etc but remove the ability to connect in an uncensored way with users in other countries and you’ve kind of removed the reason why it may be popular to users there in the first place.
• China is in a period of super-paranoia at the moment. The Bo Xilai scandal and the Chen Guangcheng case are making the leadership look like a bunch of turkeys at a very politically delicate time, ahead of next year’s once-in-a-decade Party leadership handover. If ever Facebook had a chance of launching in the country, this isn’t it.
• Zuck has reportedly held numerous meetings with Chinese web firms, and most likely has already tried to set-up some kind of joint venture or new service for the huge market there. These efforts appear to have come to nothing.

As ex-CBS bod and Sinophile Bill Bishop writes: “Facebook is blocked, the government is not allowing the company to set up operations, even in a regulatory compliant joint venture with a trusted Chinese internet firm like Baidu, and the SNS market is already quite mature, overfunded and overcrowded.”

In short, dream on Facebook.