LinkedIn, founded by former PayPal employees in 2002, is used mainly for professional networking, and reported more than 200 million registered users in more than 200 countries and territories as of January 2013. It is one of the most profitable companies in the Internet sector, with gross margins of roughly 90 per cent.
Social networking site LinkedIn names its first China president
Appointment of former Nuomi chief could signal formal launch for professionals site on mainland
LinkedIn has named a China president, indicating the professional networking site intends to formally launch in the country.
The vast global user base would help the only major global social networking site not blocked on the mainland to compete favourably with established domestic players, analysts said.
The company has named Derek Shen, former chief executive of Chinese group-buying website Nuomi, as its China head and vice-president.
LinkedIn has been studying the China market for years. While it is yet to launch a Chinese website, it has a mobile app in Chinese that has more than four million users.
"It's been flying below the radar for a while, probably observing the market and gathering information from existing users. I think they've finally decided to take the plunge," said independent technology industry observer Doug Young.
Chinese clones of LinkedIn abound, including Tianji, Dajie and Ushi. But an iResearch analyst said none of the wannabes has managed to gain control of the mainland market as they lack LinkedIn's focus.
The company's advantage over its Chinese clones will be its large, international network, said Young, an associate professor at Fudan University School of Journalism.
"Anyone who works with or sees themselves as possible candidates for bigger companies is going to gravitate towards LinkedIn," he said.
The market has been abuzz with speculation of a LinkedIn launch after BMO Capital Markets said in a research note last month that a marketing agency had been hired for LinkedIn's China outreach.
LinkedIn's foray into China, however, doesn't signal a change of attitude on part of the government towards Western social media firms, Young said.
There have also been rumours that a September meeting between Facebook's chief operating officer, Sheryl Sandberg, and the Chinese internet regulator would help the site to enter the market.
"Now that LinkedIn is doing this, they are going to have to start thinking about whether or how to police its content, because if the government sees anything it doesn't like, they'll be blocked before they even get off the ground," he said.
A LinkedIn spokesman said Shen was appointed to the role to lead efforts "to better understand how we can serve members and clients in China". "With such a wide range of features and services available on the site, we're focused on getting it right for our members and clients," he said.