Do China and Facebook have a love/hate relationship?Posted 11 July 2011 by Sandy Cosser
Today’s post differs from the norm in that we entertain a rather interesting question. The rumours that China wants to buy into Facebook have prompted some rather interesting questions, and we don’t have the answers.
China is not a fan of social networking. China doesn’t seem to be a fan of the internet at all, at least the bits of it that it can’t censor and control. The country has blocked all of Google’s applications, and wasted no time blocking Google+; it’s blocked Twitter and it’s blocked Facebook. It’s particularly leary of Facebook after it was used by protestors in Egypt and Tunisia to help them overthrow their respective governments. But, this wariness hasn’t stopped it from wanting to buy a share in Facebook.
This raises a rather interesting question: does it want to get its feet in the door to expand its business operations or does it want to try its hand at remote control?
Personally I find the move audacious. It never fails to amaze me how principles go out the window when billion dollar profits are involved. I think it’d be difficult for China to maintain its staunch anti-everything that isn’t Chinese and could taint the minds of its citizens while courting the biggest proponent of social-sharing-everything on the planet.
On the other hand, I find it equally fascinating that Mark Zuckerberg is entertaining the deal.
Technically, China isn’t buying shares directly but through a third party (rumoured to be Citibank). Apparently they can do this by buying shares from former Facebook employees. Zuckerberg comes into it because he has to approve the sales.
China buying into Facebook could have implications for another one of Zuckerberg’s projects.
In April of this year, it was reported that Facebook had made a deal with China’s biggest search engine, Baidu, to launch a new social network. This would join the country’s current social networking site, Renren.
One of the most important aspects of the deal was that that new network would be entirely separate from Facebook, so that Facebook wouldn’t have to conform to China’s stringent censorship laws. It would, however, bring in lots of money.
This deal makes sense, at least from Facebook’s point of view. It maintains its principles while bumping up its profits. And Chinese citizens benefit from an alternative social network.
But China buying into Facebook only makes sense from a Chinese point of view.
There are those that say China’s share will not entitle it to a vote. But there are also those that who think that this is only the beginning and that China’s long-term strategy is to slowly ingratiate itself into Facebook until it has amassed enough interest to control it.
It’s all very cloak and dagger.
For me the overriding question is: will Zuckerberg sell out?
Google didn’t and for its pains it remains firmly on China’s bad list. Will Facebook remain true to its ethos, or will money win in the end?
What are your views?