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Will Facebook (FB) Succeed in Making a Comeback in China?
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Despite being banned in China for years, Facebook Inc has continued its efforts to re-enter the world’s most populous market.
However, earlier this week, media reports citing an Open Observatory of Network Interference (OONI) report stated that Facebook’s subsidiary platform WhatsApp faced a massive crackdown by Beijing ahead of the upcoming Communist Party Congress. WhatsApp service has been disrupted across the mainland. Users with international SIM cards and data plans however have access to WhatsApp.
Communist Party Congress is held every five years and has played a key role in selecting leaders and in policy making. That is why the event garners so much of media attention.
Adam Segal, director of the Digital and Cyberspace Policy Program at the Council on Foreign Relations was quoted by CNN saying, "Typically, in the run up to Party Congresses, we've seen blocking, filtering, restrictions on the internet, and that's what we've been seeing in the last couple months.” In the past also, WhatsApp has been disrupted on several occasions.
Facebook’ main platform was banned in China in July 2009 following Ürümqi riots where the protestors used the platform as part of their communication network. Consequently, Beijing cracked down hard on Facebook and banned the social media site as a preventive measure. Beijing is very strict as far as Internet censorship is concerned and any potential threat is severely dealt with. Even Instagram is not available in the country.
Since then, the Facebook CEO has been looking to regain lost ground. His efforts, learning Mandarin and holding several high profile meetings with Beijing, have so far been unfruitful. But per a report by Mizuho Securities published last week it now looks like Facebook finally might have some luck.
Last week, per media reports, after talking to various industry contacts during their China trip, Mizuho Securities’ James Lee, (managing director, Americas research), and Wei Fang, (vice president, research) said in a report that Facebook has an “opportunity” to enter the Chinese market after President Xi Jinping’s second term in November this year.
This is because media and Internet scrutiny is usually relaxed a bit during any administration’s second term, thereby leading to a favorable environment for a breakthrough. Alphabet’s (GOOGL - Free Report) Google could only manage to renew its ICP license for operating in China during the second term of the President Hu Jintao, added the report.
The report also cited that Beijing’s recent approvals of other tech companies namely Microsoft’s (MSFT - Free Report) LinkedIn and Airbnb operations reflects that China “is more open to internet companies that can help Chinese companies gain global recognition through advertising or facilitate economic growth through travel.”
Facebook has a gargantuan user base of more than 2 billion despite being blocked in China, the world’s most populous country. Zuckerberg has been quoted by media reports saying, “Obviously you can’t have a mission of wanting to connect everyone in the world and leave out the biggest country. Over the long term, that is a situation we will need to figure out a way forward on.”
A few days back, per the Wall Street Journal, Facebook appointed an ex-Chinese official William Shuai to a newly created post to bolster its China efforts. Shuai will work with Facebook’s chief representative of China, Wang-Li Moser.Shuai’s extensive experience in dealing with the Chinese government should come in handy for Facebook.
At present, though Facebook’s main service is banned in China, it is available in Macau, Taiwan and Hong Kong. Facebook has also set up an office in Shanghai for its VR unit, Oculus. It also sells a lot of ads to Chinese firms who are seeking to expand their business in foreign markets.
Not just Facebook, China is a major market for most of the tech behemoths. Recently, Apple Inc (AAPL - Free Report) appointed Isabel GeMahe to a newly created post of vice president and managing director of Greater China. Creation of the post of managing director for China operations underscores the importance of the market. China is one of Apple’s biggest markets.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Image: Bigstock
Will Facebook (FB) Succeed in Making a Comeback in China?
Despite being banned in China for years, Facebook Inc has continued its efforts to re-enter the world’s most populous market.
However, earlier this week, media reports citing an Open Observatory of Network Interference (OONI) report stated that Facebook’s subsidiary platform WhatsApp faced a massive crackdown by Beijing ahead of the upcoming Communist Party Congress. WhatsApp service has been disrupted across the mainland. Users with international SIM cards and data plans however have access to WhatsApp.
Communist Party Congress is held every five years and has played a key role in selecting leaders and in policy making. That is why the event garners so much of media attention.
Adam Segal, director of the Digital and Cyberspace Policy Program at the Council on Foreign Relations was quoted by CNN saying, "Typically, in the run up to Party Congresses, we've seen blocking, filtering, restrictions on the internet, and that's what we've been seeing in the last couple months.” In the past also, WhatsApp has been disrupted on several occasions.
Facebook’ main platform was banned in China in July 2009 following Ürümqi riots where the protestors used the platform as part of their communication network. Consequently, Beijing cracked down hard on Facebook and banned the social media site as a preventive measure. Beijing is very strict as far as Internet censorship is concerned and any potential threat is severely dealt with. Even Instagram is not available in the country.
Since then, the Facebook CEO has been looking to regain lost ground. His efforts, learning Mandarin and holding several high profile meetings with Beijing, have so far been unfruitful. But per a report by Mizuho Securities published last week it now looks like Facebook finally might have some luck.
Last week, per media reports, after talking to various industry contacts during their China trip, Mizuho Securities’ James Lee, (managing director, Americas research), and Wei Fang, (vice president, research) said in a report that Facebook has an “opportunity” to enter the Chinese market after President Xi Jinping’s second term in November this year.
This is because media and Internet scrutiny is usually relaxed a bit during any administration’s second term, thereby leading to a favorable environment for a breakthrough. Alphabet’s (GOOGL - Free Report) Google could only manage to renew its ICP license for operating in China during the second term of the President Hu Jintao, added the report.
The report also cited that Beijing’s recent approvals of other tech companies namely Microsoft’s (MSFT - Free Report) LinkedIn and Airbnb operations reflects that China “is more open to internet companies that can help Chinese companies gain global recognition through advertising or facilitate economic growth through travel.”
Facebook has a gargantuan user base of more than 2 billion despite being blocked in China, the world’s most populous country. Zuckerberg has been quoted by media reports saying, “Obviously you can’t have a mission of wanting to connect everyone in the world and leave out the biggest country. Over the long term, that is a situation we will need to figure out a way forward on.”
A few days back, per the Wall Street Journal, Facebook appointed an ex-Chinese official William Shuai to a newly created post to bolster its China efforts. Shuai will work with Facebook’s chief representative of China, Wang-Li Moser.Shuai’s extensive experience in dealing with the Chinese government should come in handy for Facebook.
At present, though Facebook’s main service is banned in China, it is available in Macau, Taiwan and Hong Kong. Facebook has also set up an office in Shanghai for its VR unit, Oculus. It also sells a lot of ads to Chinese firms who are seeking to expand their business in foreign markets.
Not just Facebook, China is a major market for most of the tech behemoths. Recently, Apple Inc (AAPL - Free Report) appointed Isabel GeMahe to a newly created post of vice president and managing director of Greater China. Creation of the post of managing director for China operations underscores the importance of the market. China is one of Apple’s biggest markets.
4 Stocks to Watch after the Massive Equifax Hack
Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?
Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.
Get the new Investing Guide now>>