What’s The Story With Facebook In China?

The Great Wall Of China has been keeping out Facebook, but rumors have been increasing in volume about a potential joint venture between the social network and Chinese search behemoth, Baidu -- but what if they're untrue?

BusinessmanChinaFlag650The Great Wall Of China has been keeping out Facebook, but rumors abound about a potential joint venture between the social network and Chinese search behemoth, Baidu, have increased in volume since Friday. But what if they’re untrue?

While Reuters reports that no agreement has been reached — the article doesn’t cite sources, but Facebook spokespeople often disclose information off the record — conversations have definitely started, beginning with Chief Executive Officer Mark Zuckerberg’s trip to China in December, and the U.S. visit by Baidu executives in February.

Another Site?

The most curious aspect of the rumors is that the partnership involves setting up a new site, not on Facebook.com itself. While that would sound like a last ditch resort for the U.S. social network, it doesn’t sound like the first thing the company would be pushing for.

However, if the Chinese government will not let the company set up shop within the country, a new site may be the only chance for the U.S. company to make an impact on the market. The only way I could see this happening is if Baidu was going to make a significant payment to Facebook in exchange for their involvement.

While global dominance is critical to Facebook’s future growth, the company currently makes all of its money via visitors who come to the site multiple times throughout the day. One alternative to a lump sum payment would be for Facebook to power the ad network on this new site.

What Would It Look Like?

If a product was born out of a partnership between Baidu and Facebook, what exactly would that look like? Unfortunately I can’t even begin to speculate what such an agreement would look like as it’s so out of the ordinary. Would Facebook white label a version of their site under a different brand name, even though the company has never done so before? Would they try a completely different strategy, despite having so much success with their existing one? Perhaps Baidu could pay a large amount to run a subsidiary site powered by the two companies?

While a potential partnership is definitely an interesting thing to speculate about, this seems like such a dramatic step for Facebook, we’d have to simply wait and see what comes out of all these conversations. At this point though, it’s not clear whether or not any sort of agreement has actually taken place.

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