Why Facebook won't work in China - Benjamin Joffe

Benjamin Joffe

Facebook's IPO forced this other question upon us: is the company ready for China? Forget it, tells internet expert Benjamin Joffe of the digital research & strategy firm +8* (Plus Eight Star) in Techcrunch. 

Techcrunch

Facebook has been blocked there for years, and there is simply no way around the local definition of what constitutes objectionable content. Any web or mobile company who does not self-censor faces shut down if it local, and blocking if not. 

While I’ve heard local entrepreneurs say it is not worse than dealing with Sarbanes-Oxley, the enforcement is roughly equivalent to how other governments might deal with terrorists, drug dealers, pedophiles, and organized crime (the “four horsemen of Internet apocalypse”), or how mass media deals with touchy topics that could upset the powers that be, or their advertisers. For foreign companies that offer content – published either by themselves or by users – it is a pretty big headache, compounded by the double set of constraints they have to deal with: those at home and those in China. 

The PR headaches are – as Google experienced – pretty solid. And the question is: is it worth the effort? Assuming content is managed, China is not a walk in the park anyway: it is easily the most competitive market on the planet, simply because there are so many entrepreneurs and so much venture money. Social networks? China already has TWO listed on the stock market: Tencent (worth $53.4 billion) and RenRen (listed in May 2011 on the NYSE and today valued at $2.43 billion).

More in Techcrunch.

Benjamin Joffe is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Baidu gets Tencent's weibo in search results - Kaiser Kuo

Kaiser Kuo

China's leading search engine Baidu now includes Tencent's microblogs in its search results, tells Baidu's communication director Kaiser Kuo on its weblog Baidu Beat. Search and social media get one step closer in China.

Kaiser Kuo:

This strategic partnership marks the latest effort in an ongoing attempt to streamline users’ internet experience by concentrating online resources on fewer platforms. With a Tencent Weibo feature embedded in the homepage – as shown below – users can directly receive real-time microblog news and post updates... 

Since Baidu released its new homepage in September 2011, it has steadily sought out ways to socialize search, enhancing the search portal with user account information, intelligent recommendations, and quick links to popular sites. Baidu and Tencent believe that joining forces in this way strengthens the services of both companies, allowing information to flow more freely across the two platforms and improving the user experience of millions. 

From the time that we launched the new homepage, Sina Weibo was already supported, as were the popular SNSs, Renren and Kaixin001.

More on Baidu Beat.

Kaiser Kuo is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Kaiser Kuo, speaking on China's internet, at Storify.

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Soft landing expected for China stocks - William Bao Bean

William Bao Bean

The fairy tales of sky-high valuations for China internet companies at exchanges in the US seem over, yet again. Financial analyst and VC William Bao Bean expects a return to realistic valuations, in a soft landing, he tells The Australian.

The Australian:

Shares of online bookseller E-Commerce China Dangdang, which surged 87 per cent on their New York Stock Exchange debut in December and peaked even higher in January, fell below their IPO price for the first time last week.

Renren's shares jumped 29 per cent on their debut a month ago but sank back below their IPO price of $US14 the next week, and were trading at $US7.90 in New York.

And Baidu's shares have fallen 20 per cent from a closing peak seven weeks ago, wiping out about $US10.7 billion in market value .

In roughly the same period, the Nasdaq Composite index has fallen 7.6 per cent from a closing peak in late April and China's benchmark stock index has fallen 11.5 per cent from a closing peak that month.

"There are fewer and fewer and fewer reasons to expect any increase in the stock prices - there are fewer positive catalysts, and investors are looking for reasons to sell," said William Bao Bean, managing director of investment at SingTel Innov8, a venture-capital unit of Singapore Telecommunications.

"I think what you'll see is a gradual deflation. The stocks have to grow into their valuations."

More on the China Internet bubble in The Australian.

William Bao Bean is a speaker at the China Speakers Bureau. When you need him at your meeting of conference, do get in touch.

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Not _all_ listed Chinese companies are bad - Shaun Rein

Shaun Rein

Long term China bull Shaun Rein warns against buying into listed Chinese companies, since in many cases they offer a receipt for trouble, he argues in CNBC. Not all NASDAQ listed Chinese companies are bad, but investors have to be very cautious.

Almost all suspended NASDAQ stocks belong to Chinese firms, Rein notes, and he sets some ground rules:

Another rule to follow is to be wary of firms that list in the US first because they did not qualify to go public on the mainland. Internet and social media companies Ren Ren[RENN 12.60   -0.56  (-4.26%)   ], Youku [YOKU  44.49   -4.05  (-8.34%)   ] and Dang Dang[DANG  19.95   -1.01  (-4.82%)   ] recently listed on the New York Stock Exchange, but would not have been allowed to list on the mainland because they don’t have enough profits. Companies need three years of profits before they can go public on the mainland China exchanges. In the US, you do not need to show profits in order to go public. Most senior executives have told me they would rather list in China if they could because they expect the yuan to appreciate.

Also be careful of boutique banks, investor relation firms and accounting companies, called middlemen firms, which are responsible for taking companies public and for pumping up stock prices.

More in CNBC.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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The pros and cons of Renren's IPO - Jeremy Goldkorn

Jeremy Goldkorn by Fantake via Flickr

The valuation of China's leading social network Renren has done up dramatically just ahead of its IPO on Wednesday. Jeremy Goldkorn explains in Seeking Alpha why both excitement and caution should lead the investors.
On the pros: It is probably the closest a Chinese internet firm can come to Facebook. Renren has a highly competitive management with much experience in social networks. It has build up a close relationship with (potential) advertisers and is making some money.
On the cons: Renren is not China's equivalent of Facebook and is facing at home a brutal competitive landscape. And while it might make money in the future, is does not do it yet.

More in Seeking Alpha.

Jeremy Goldkorn is one of the leading voices on China's internet scene. He is also a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.

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