Is LinkedIn preparing for a China push?
Founder Reid Hoffman has been doing his homework
Self-styled professional social networking site LinkedIn is planning to make a move in the Chinese market, if rumours are to be believed, as it seeks to further its plans for worldwide domination.
CNET China reported that founder Reid Hoffman met big name homegrown web firms Baidu, 360.cn, Sina and Renren last week to discuss the possibility of setting up a business operation in the country.
Although that was pretty much all the unnamed source had to say about the matter, it would be a logical move for the social-network-for-suits, which has over 150 million users and recently floated on the stock market valued at well over $4bn.
LinkedIn already has an Asia Pacific office, opened in Singapore last year, although China, with its strict censorship laws and idiosyncratic business practices, would certainly demand a separate outpost.
If it made a move in China, the firm would come up against local rivals in the form of fast-growing Tianji (which has over six million users) as well as Wealink.com, Renhe.cn and many other smaller players.
Ovum senior analyst Saurabh Sharma told The Reg that LinkedIn would face a tough battle in this crowded market full of players who have a better cultural understanding of the region.
"It is also important to understand that primarily LinkedIn will serve as an enabler to the networking of Chinese professionals and should have realistic expectations for growth potential in this market," he added.
"Success will be primarily determined by its ability to provide a tailor-made user experience that includes functionalities that are already being provided by its local competitors."
One thing that will work in LinkedIn’s favour is that, unlike Facebook, it is not banned in China, although it was blocked for a day or so last February during the time of the Arab Spring protests.
And it's unlikely to clash with the censors because it focusses strictly on business professionals sharing work-related information, whereas regular social networks like Facebook - whose users can swap random thoughts and opinions - quite frankly terrify the Chinese authorities.
China, with its growing middle class and estimated 500m+ web users, represents an attractive prospect for any growing business-to-consumer tech company, but as Google found out it can be a challenging environment to flourish in.
It wouldn’t be out of the question to see LinkedIn partner with a local specialist to establish itself in what can be a hostile market for foreign companies. ®