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Zucking up

11 Dec 2014 By Katrina Hamlin

It’s no longer unthinkable that Facebook could one day return to China. But while founder and chief executive Mark Zuckerberg is cosying up to censors, the real challenge will be wresting new friends from huge local rivals.

A comeback in China looks within reach, if Zuckerberg is willing to operate on China’s terms. Although the U.S.-based social network has been blocked since 2009, internet policy chief Lu Wei recently paid a chummy visit to Facebook’s American campus. The company has also proven willing to compromise with authorities when it comes to privacy. It provided data in response to more than 20,000 government enquiries around the world in the first half of this year, around 60 percent of the total requests it reported.

The urge to play catch-up may please investors. China has more than 600 million internet users – around half of Facebook’s current active user base of 1.3 billion. But catching up for lost time wouldn’t be easy. Even before the site was blocked, it had relatively few users in China, and brutal competition is now an even more robust barrier to entry than the Great Firewall, as China’s internet controls are known.

China’s home-grown internet companies have come of age since Facebook was last a threat: Zuckerberg would be hard-pushed to lure Chinese netizens away from the likes of WeChat and Sina Weibo.

Since it would be tough to beat them, perhaps Facebook could join them. It’s a long shot, but a Chinese partner could help given the right motivation. There may be scope for tie-ups with ambitious kingpins like Alibaba’s Jack Ma, who are keen to build a global audience. China’s appetite for e-commerce and online gaming could also offer another way to attract users. Consider Taiwan, where Zynga’s Farmville game became a major driver for Facebook sign-ups.

Even if Zuckerberg makes an entrance, he will have to handle his interests in China with care. There’s a real danger that users around the world will find his charm offensive plain offensive, fearful of threats to their privacy and freedom of speech. Investors can only hope the Facebook founder knows how to keep his old friends as well as make new ones.


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