360° Coverage : Whatsapp: Facebook's Entree to China?

2 Updates

Whatsapp: Facebook's Entree to China?

Feb 24 2014, 7:19am CST | by

I haven’t written about Facebook (Nasdaq: FB) in a while, mostly because the company hasn’t made any concrete moves into China lately despite previous assertions that it would like to enter the...

Filed under: news

 
 
 

34 weeks ago

Whatsapp: Facebook's Entree to China?

Feb 24 2014, 7:19am CST | by

I haven’t written about Facebook (Nasdaq: FB) in a while, mostly because the company hasn’t made any concrete moves into China lately despite previous assertions that it would like to enter the market. But the company’s newly announced plan to purchase the popularWhatsApp mobile messaging service for up to $19 billion looks like a good opportunity to revisit the topic, and what this deal might mean for Facebook in China. Facebook’s own site has been blocked in China since 2009, making it inaccessible to the vast majority of more than 600 million Chinese web surfers. But WhatsApp is widely available, even though it competes with the wildly popular rival WeChat service from local Internet giant Tencent. (HKEx: 700)

Let’s kick off this latest look at Facebook in China with a quick recap of its biggest acquisition to date, which will see it buy Whatsapp for $4 billion in cash, $12 billion in stock and $3 billion in restricted shares. (English article) The deal is the world’s largest tech acquisition since Time Warner’s (NYSE: TWX) $124 billion merger with AOL in 2001 at the height of the dot-com bubble of the late 1990s. The deal will give Facebook access to 450 million members of WhatsApp, which is popular in both North America and Europe.

Now that we’ve looked at the bigger deal, let’s zero in on the implications for China. As a user of both WhatsApp and WeChat, I can personally testify that the former is a relative non-player in China, while the latter has become an instant messaging giant in its home market over the last 2 years. I use WhatsApp to communicate with many of my friends outside China, and use WeChat to stay in touch with nearly all of my China-based friends.

In terms of functionality, I do think that WeChat is a bit better than WhatsApp. One of WeChat’s most popular features is a Facebook-like function that lets people share photos and links with their friends, and WeChat also has several GPS-linked features that WhatsApp lacks. In my view, WhatsApp’s biggest potential attraction for Chinese users is the fact that it’s not based in China, and therefore is less likely to raise suspicions that it monitors its users for politically sensitive content.

A number of non-Chinese friends have told me they’re reluctant to use WeChat because they think their conversations may be monitored. Many Chinese may feel the same way, meaning they might be tempted to try out WhatsApp or other non-Chinese products like Japan’s Line. That general suspicion about domestic products and services leads many Chinese to already prefer global e-mail services like Google’s (Nasdaq: GOOG) Gmail over homegrown products from companies like Sina (Nasdaq: SINA) and NetEase (Nasdaq: NTES).

Facebook co-founder Mark Zuckerberg has said several times that he wants his service to be a truly global product, and that China is an important part of that equation. He has made several trips to China to check out the market, and was even rumored at one point to be in talks about a joint venture with leading search engine Baidu (Nasdaq: BIDU). But tough conditions from Beijing have prevented any deal up until now, including a likely requirement that Facebook set up a separate China service and actively monitor the site for politically sensitive content.

So the new question becomes: How is the WhatsApp acquisition likely to change Facebook’s China approach? My guess is we won’t see any major moves on the China front this year, as Facebook will be more focused on integrating WhatsApp with its own operations. But we could see some quiet promotions by WhatsApp targeting Chinese users as soon as next year.

If Facebook takes that approach it will need to be careful, since Beijing can easily block access if it feels threatened by the service. I did a quick poll of a few of my friends who follow the space, and all agree that WhatsApp is unlikely to be blocked if it takes a careful approach and remains faithful to its core function of letting individuals communicate on a one-to-one basis. If WhatsApp can do that and steer clear of other politics, it might be able to find a limited but lucrative audience of Chinese white collar workers attracted by the app’s more international image and exposure.

Bottom line: Facebook could make a push into China next year using its newly acquired WhatsApp mobile platform, and could score modest success among more educated demographics.

Doug Young is a former China company news chief for Reuters who teaches financial journalism at Fudan University in Shanghai. To read more of his commentaries on China tech news, click on www.youngchinabiz.com.

Source: Forbes Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20,000 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and MH17" hits home ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Spanish nurse cured of Ebola
Madrid, Oct 21 (Xinhua) Spanish nursing auxiliary Teresa Romero was pronounced cured of the Ebola virus disease according to World Health Organisation (WHO) guidelines after the results of a second test confirmed Tuesday that she no longer had the virus in her blood.
 
 
Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development.
 
 
Colombia to launch world's first floating gas liquefaction plant
Bogota, Oct 21 (IANS/EFE) The world's first floating gas liquefaction plant is due to begin operating next year off the coast of northern Colombia under a pact between Canada-based Pacific Rubiales Energy and Belgian shipbuilder Exmar.
 
 
Paralysed man walks again after pioneering cell therapy
London, Oct 21 (IANS/EFE) A paralysed man has been able to walk again after therapy that involved transplanting cells from his nasal cavity into his spinal cord, the BBC reported Tuesday.
 
 
 

Latest from the Network

Keira Knightley was 'a goody two-shoes'
Keira Knightley was ''a goody two-shoes'' when she was younger. The 29-year-old actress claims she was a ''boring'' well-behaved child and never skipped school because she didn't want to upset her parents or teachers....
Read more on Celebrity Balla
 
Kat Dennings is in love with Kim Kardashian
Kat Dennings thinks Kim Kardashian's butt is ''amazing.'' The '2 Broke Girls' actress was ''very nervous'' when the 'Keeping Up with the Kardashians' star filmed a cameo for the show's 80th episode and was too shy to...
Read more on Celebrity Balla
 
Taylor Swift doesn't 'need some guy' for inspiration
Taylor Swift is ''figuring out how to cope'' with life on her own. The 'Shake It Off' hitmaker hopes her upcoming album, '1989,' will prove she doesn't ''need some guy'' to help her ''make a great record'' or to feel...
Read more on Celebrity Balla
 
Sarah Hyland is 'great'
Sarah Hyland says she is ''great'' after obtaining a restraining order against her ex-boyfriend. The 'Modern Family' star is happy to be focusing on her career again after a judge recently granted her a three-year...
Read more on Celebrity Balla
 
India re-elected to UNHRC for two years
United Nations, Oct 21 (IANS) India was Tuesday re-elected to the United Nations Human Rights Council (UNHRC) for the term 2015-2017 in a keenly contested election in the UN General Assembly in New York. Other...
Read more on Politics Balla
 
Spanish nurse cured of Ebola
Madrid, Oct 21 (Xinhua) Spanish nursing auxiliary Teresa Romero was pronounced cured of the Ebola virus disease according to World Health Organisation (WHO) guidelines after the results of a second test confirmed...
Read more on Business Balla
 
Gurdwara closed in Belgium
Brussels, Oct 21 (IANS) The mayor of the town of Vilvoorde in Belgium, Hans Bonte, has ordered the closure of the local gurdwara, Guru Nanak Sahib, for one month. Belgian media Tuesday charged that the Sikh temple "...
Read more on Politics Balla
 
Air strikes kill 28 militants in Pakistan
Islamabad, Oct 21 (IANS) At least 28 militants were killed when the Pakistani army launched an air strike in the country's northwest tribal town of Datta Khel Tuesday, military said. In a statement, Inter Services...
Read more on Politics Balla
 
Report reveals large-scale torture in China's 'Black Jails'
Beijing, Oct 21 (IANS/EFE) The use of hotels and factories as clandestine prisons where thousands of people -- mostly women -- are tortured to prevent their complaints against the government from coming to light has...
Read more on Politics Balla
 
Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development. WHO Assistant...
Read more on Business Balla