Facebook, Baidu in Chinese joint venture?

Facebook remains quiet on rumored partnership with Chinese Internet giant to set up local social networking site, but says it's "evaluating possible approaches" to enter China. Analyst believes U.S. company may succeed in fledgling local market.

U.S. social networking site Facebook is reported to be in talks with Chinese search giant, Baidu, to set up a joint venture but no actual deal has been confirmed, according to news reports.

Business Insider on Monday reported that Facebook and Baidu have yet to sign a deal to set up a rumored social networking site in China. The U.S. social network, along with other Web services, is currently banned in the country.

Despite the absence of an actual deal, the Facebook said it is keen on the sizeable Chinese market. In an e-mail statement to Business Insider, the company said: "Facebook is currently studying and learning about China, as part of evaluating any possible approaches that could benefit our users, developers and advertisers."

Rumors of the Facebook-Baidu partnership surfaced last week when Hu Yan Ping, manager and founder of Internet research centers DCCI, wrote on his microblog that Facebook "really is about to enter China", according to a social media blog. Hu went on to say that the rumored joint-venture social networking site will not be interlinked with Facebook.com and questioned if such a site "would surely die", or "非死不可", which sounds phonetically similar to "Facebook" when translated in Chinese.

Lukewarm user response
In a phone interview with ZDNet Asia, Hangzhou-raised Lilian Jiang, said she is unlikely to use Facebook even if it enters the Chinese market with a local partner.

The 25-year-old business analyst, who recently moved to Singapore from her Shanghai office, said she and her friends turned to local social networks because they were unable to access Facebook in China. Jiang has accounts with two social networks, Renren Network (formerly called Xiaonei Network) and Kaixin Network. She uses the first to interact with her friends from university, while Kaixin is used for communications with colleagues.

A user of Renren for five years, Jiang said she is unlikely to join a new social networking site unless her new contacts are in a different network. She added that Renren already offers functionalities similar to Facebook's, including status updates, journals and photo albums.

A local industry analyst, however, believes the Chinese social media market is still developing and has no clear leaders as yet.

Deco You, an analyst at iResearch, believes Facebook's entry into China is "eventual" due to globalization and the government's attempts to open up the Chinese market.

As it would be difficult for the U.S. company to enter the market directly due to various reasons such as public policy, partnering with a local player could work to Facebook's benefit, You told ZDNet Asia in an e-mail.

While social networking sites in China have grown in popularity, the analyst believes the country's "social media era" has only just begun and there are no clear market leaders yet.

He noted that Facebook has a chance of succeeding in the Chinese market, but it will take time. You said: "This is a long-term battle and not a short-term contest."

The U.S. Internet giant in February opened an office in Hong Kong to support marketing and advertising initiatives. The move was widely seen as part of Facebook's efforts to pave its way into the Chinese market.

According to the state-owned China Internet Network Information Center, the country's online population currently stands at 457 million.


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