Following on from our Q&A with Benjamin Joffe about how Facebook compares to top Asian social networks, Kaiser Kuo from Ogilvy China Digital Watch reported today that Facebook users in China “received a message on their main pages this morning asking them to help out with the translation of the site into simplified Chinese”. Kaiser calls this a “a very Web 2.0 approach to the arduous task of translating the site.” This is the latest example of speculation that Facebook is about to enter the booming China market.
Also fueling rumors that Facebook will launch in China is a report from Marketwatch stating that Hong Kong tycoon Li Ka-shing has increased his personal investment in Facebook to more than US$100 million. Sounds impressive, however his initial investment had been $60 million for just 0.4% of the company – remember it has a $15 billion valuation. So he probably hasn’t even cracked 1%.
Benjamin told us in our interview that currently “Facebook has almost no presence in the three markets we cover: China, South Korea and Japan.” In China, QQ is the dominant player with 300 million active accounts. MySpace has a presence in China, but according to the Forbes report linked above, it “hasn’t been able to steal significant market share from any of the top Chinese social-networking sites since it launched in China a year ago.”
We reported in November that Facebook made an $85 million offer to purchase Zhanzuo.com, a leading Chinese social network with 7 million users. Nothing appeared to come of that though.
Forbes noted that Facebook currently has 247,000 members from China. If you browse Facebook, you’ll come across Chinese language users in Facebook. So this move by Facebook to crowdsource the site translation would be one step in formalizing that user base. But there’s still the matter of monetizing and doing business development in China, which would require an office and staff there.
Can Facebook Be Competitive in China?
It would be fascinating to see Facebook try to enter China, a Web market that is very tough to succeed in for Western companies. This was one of the main themes to come out of the recent Media 08 conference in Sydney, at which I met both Benjamin and Kaiser. Indeed a presentation at Media 08 by Jonathan Haagen, an analyst from the Economist Intelligence Unit, was entitled Why Western Tech Companies Fail in China(!) I’ve embedded it below, because it’s well worth Facebook’s execs reading it 😉
