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Rumor: Facebook Seeks to Launch Global SNS in China with Baidu

Tencent Tech, 4/29/11

Multiple industry sources have told the Wall Street Journal's digital media blog AllThingsD.com that Facebook is accelerating plans to enter the China market, most likely in partnership with Chinese internet company Baidu (Nasdaq: BIDU).

Numerous sources reported that Facebook senior management has intensified efforts to create a detailed plan for entering China and to implement it as quickly as possible. According to one source, there are multiple indications that Facebook has selected Baidu as a local partner. Although Facebook previously had discussions with Chinese e-commerce giant Alibaba, the two companies had strategic disagreements on whether to connect to Facebook's global social network, making Baidu a more viable candidate.

According to another source, Facebook has proposed that Baidu assume the costs of constructing the website, and the two companies will share revenues.

Editor's Note: AllThingsD also reports that Facebook appears to be inclined to connect a China venture to its global network rather than have a segregated SNS, and that while Chinese internet company Sina (Nasdaq: SINA), Tencent (0700.HK), and China Mobile (NYSE: CHL; 0941.HK) were considered partners, it was decided their social products had too much overlap. Facebook reportedly has 400,000 active users in mainland China, according to AllThingsD. Overseas users would see a notice about Chinese legal regulations when visiting a China-based user's profile, and Baidu would presumably be responsible for censoring content in accordance with Chinese law. For more background on this topic, please see "Facebook, Baidu Deny Partnership Rumors" MD 4/12/11 issue.

Keywords: online search China Mobile Internet Baidu Tencent Facebook SNS active users CHL Sina 0700.HK 0941.HK BIDU regulation Alibaba Group

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