Launched in February 2004, Facebook is a social networking service founded by Mark Zuckerberg with his college roommates and fellow students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz and Chris Hughes. Early investors include Microsoft and Hong Kong tycoon Li Ka- shing, through his namesake charitable foundation. Facebook’s US$16 billion initial public offering in May 2012 generated huge investor interest although the shares subsequently slumped in price.
Despite the Great Firewall, Facebook’s business is slowly growing in China
According to some insiders, Facebook is still used by Chinese companies seeking to expand their influence beyond the mainland
Chinese authorities blocked access to Facebook in July 2009, but despite remaining behind the Great Firewall ever since, the world's biggest social network has still managed to infiltrate China's businesses and web infrastructure.
Yesterday, Bloomberg reported Facebook is “taking steps” to open a sales office in China, according to people familiar with the matter.
In as little as a year, Facebook could have boots on the ground for the first time in China, even though the company's site will remain censored.
Facebook’s VP of special projects Vaughan Smith has been making the rounds in China, appearing at both Stanford and Peking University’s joint China 2.0 forum and the recent Global Mobile Internet Conference in Beijing, where he spoke on how Facebook is being used as an effective marketing tool for Chinese companies to tap into audiences beyond their borders.
Smith went so far as to say that Facebook contributes to China’s economic growth, citing mobile developers and exporters as examples.
Among them, Facebook has helped Chinese game studio FunPlus expand its social game Family Farm Seaside to an international audience, and Smith said that Facebook was the “number one way” for fashion e-store exporter Wholesale Dress to reach customers outside China.
Smith also added that both Alibaba and Baidu use Facebook’s technology in their data centers.
The number of customers for Facebook’s advertising and distribution services are growing in China, despite the fact that the companies using them have to use virtual private networks (VPNs) or similar means to circumvent the Great Firewall.
This is where Facebook must tread lightly. Although it’s being used for business and not social purposes, Facebook still indirectly encourages Chinese citizens to bypass censorship measures put in place by the government, and the American company will have to walk a fine line to avoid Beijing’s ire in this regard.
Up to now, Facebook has used its office in Hong Kong as a base of operations for mainland China-related business.
Facebook hasn’t confirmed a timeline or location for its new office, although Bloomberg reports that the company is preparing to lease office space in Beijing’s central business district.
The move could be a preemptive stepping stone for Facebook’s grander plans. As China gradually opens up to the world, there’s always a chance for the Great Firewall to be knocked down, however slim, and Facebook will be on the ground floor, ready to strike.
This article was originally reported by Tech in Asia and was edited and republished with permission.
Additional reporting by Jeremy Blum