Mark Zuckerberg is trying again to break into China. But Facebook’s effort has already hit a wall. As in the past, it will almost certainly fizzle out.
Zuckerberg really, really wants his social network to operate in China. Back in early 2010, the CEO publicly challenged himself to learn Mandarin. And soon he was negotiating furiously to enter the Chinese market (still speaking English, of course). He made well-publicised visits to top Chinese tech companies. By early 2011, according to company insiders, Zuckerberg believed he had a deal to partner Baidu and together launch a version of Facebook in China.
The Arab Spring changed all that. President Zine El Abidine Ben Ali fled from Tunisia in mid-January, and Egyptian strongman Hosni Mubarak resigned in early February. It was a clear sign to the world, and to the Chinese Communist Party leadership, that Facebook had concrete political potency, by empowering ordinary citizens to organise and speak out against governments they did not like. Facebook’s deal with Baidu was decisively cancelled.
Ask Google? How to win in China … without being evil
Now Facebook and its arch-rival Google are both ramping up new efforts in China. It’s not hard to see why. China is by far the world’s largest internet community, the fastest-growing region for e-commerce, and soon to be the world’s largest economy. Indeed, it is already the second largest source of advertising revenue for Facebook. While government control of the internet has only strengthened in China, these vastly profitable global companies desperately want in on the action.
So Facebook in late July announced the establishment of a new “innovation hub” in Hangzhou, supposedly aimed at assisting local start-ups. But the initiative was abruptly cancelled and its online registration removed, within a day. Clearly, the proper authorities had not been consulted. Google, with a much deeper history in the country, is reportedly now preparing a special censored version of its search engine as well as talking to local partners to help launch its cloud services business in China. Google ran a censored search service in China from 2006 until 2010, when government pressures became too much, and the company withdrew.
Fighting cancer in Singapore, eating plastic in Indonesia: is Southeast Asia the next Silicon Valley?
Today Facebook is blocked in China, as are the company’s three other billion-plus-user properties Instagram, WhatsApp and Facebook Messenger. But Zuckerberg’s “innovation hub” will not be his last Chinese foray. For this CEO it is an article of faith that his company’s services should be available to all of humanity. He sees his mission to be “building global community”, as he frequently puts it, and it is inconceivable to him that this huge chunk of mankind should be permanently off limits. He thinks of himself as a sort of benefactor, destined to help bring people together and empower them with technology.
He does not entertain self-doubt. Nor is he easily deterred. And he deeply believes that Facebook is a service every human deserves access to. It’s also worth remembering that he has total and absolute control over this gigantic company.
But he does not have very good political instincts. He failed in the US and in numerous other countries to anticipate the many ways his platform would be used by dishonest and unethical politicians and activists to subvert online dialogue and distort democracy. And he appears to be continuing to credulously entertain the preferences of the Communist Party, even though there is no way he could meet them.
In a recent interview, Zuckerberg did concede, regarding China, that “we need to figure out a solution that is in line with our principles and what we want to do, and in line with the laws there”. He also conceded that “right now, there isn’t an intersection”. But that is an understatement, and “right now” still implies unreasonable optimism.
Why Hong Kong’s plan to attract the next Google is a great leap backwards
Yet Zuckerberg continues what has for years seemed an almost comically craven pursuit of this market. He serves on the advisory board of the Tsinghua University school of economics and business in Beijing. He routinely visits China to attend conferences and meet government leaders. The New York Times even reported that he asked Xi Jinping to give a Chinese name to his soon-to-be-born daughter (Xi demurred).
Were Facebook ever to successfully operate any of its services in China, it would have to make several concessions. It would need to surrender full control, by partnering with a local company. It would need to maintain servers in China. It would have to give the government access to data about individual accounts. And it would have to be willing, even eager, to remove content that the government found illegal or offensive.
While it might conceivably be willing to do some or all of those things, in the process it could very well offend and frighten off users in the 190 other countries where it operates. Many of them would certainly not want the Chinese government to have direct access via Facebook to information about them. And the negative PR fallout in other countries of making such concessions would be gigantic.
It is inconceivable that Facebook could maintain its commitment to open public dialogue and free speech – a deeply and profoundly American ethos – and simultaneously satisfy the controlling demands of the Communist Party.
It probably does not matter anyway. There is little market demand for Facebook’s services. WeChat dominates China’s online social interactions, and already makes Facebook-like functions available. China’s robust innovation ecosystem creates new companies and services almost daily. At best, Facebook might be reduced to creating an entirely new service specially for China.
For most of its 14-year life, Facebook has commanded broad respect for its resourceful growth strategies, a high-minded vision about its corporate purpose, and in recent years for phenomenal and growing profitability. But since the election of Donald Trump, the world has become aware of its failures to properly govern political activity and speech on its platform. The company’s reputation has plummeted. Then, in late July, executives reported both that its growth would slow and that its profitability had begun to decline. A historic drop in market value followed.
All the tools – and weapons – China can use for global tech dominance
An entirely new company era has begun. Its political behaviour and its privacy policies are being scrutinised like never before. Governments all over the world are warily moving towards regulation. And let’s not forget it is a consummately American company at a time of growing trade tensions with China. Google has shown it is willing to compromise to get into China. It may again succeed. But Facebook’s compromises would be infinitely more painful. Whether or not Mark Zuckerberg, still only 34, can see it, this giant part of the internet’s population is going to remain off limits. ■
David Kirkpatrick is the author of The Facebook Effect and founder of the Techonomy conference
