Tech start-ups are looking towards China booming Web 2.0 market

By Anthony James, Staff Writer

Late last December, Facebook's billionaire founder Mark Zuckerberg took a learning tour of China, sampled the corporate campuses, and met with its top tech leaders. There were many rumors concerning what the trip meant for one of the most influential people in the world. One thing was for sure: Facebook has its sights on China's emerging social media market.

Tech start-ups are looking towards China booming Web 2.0 market

By Anthony James, Staff Writer

Late last December, Facebook's billionaire founder Mark Zuckerberg took a learning tour of China, sampled the corporate campuses, and met with its top tech leaders. There were many rumors concerning what the trip meant for one of the most influential people in the world. One thing was for sure: Facebook has its sights on China's emerging social media market.

 The signs are clear, Zuckerberg has vowed to learn all he can about Chinese culture and its business market; he has even enlisted in a crash course to learn the Mandarin language. For Westerners this is might be a bit of surprise, especially when the government of China has banned the Facebook from appearing in their country. The question remains: Why China?

Asia is home to the fastest growing social networking market in the world. Millions of users have registered for Facebook from Indonesia, Thailand, and Singapore in only months. In China, inherent companies such as the Facebook-similar Renren.com have overtaken their U.S. counterparts, allowing students to connect with one another in ways much similar to the United States. But censorship still hasn't kept Facebook from the market completely. Even with the ban, almost 300,000 people in China have registered in Facebook by going around the firewall. For the United States, this market will be key for technology leadership in the Web 2.0 world.

In a recent article, Skype co-founder Niklas Zennström noted that China's tech market is very different from Europe's in that there is a high volume of tech start-ups willing to take substantial risks in the market. This kind of market is very attractive for investors. And from investors: innovation.

Here in the United States it can be hard to think of China as a potentially successful market for internet start-ups. More controversial policies in the PRC involve taking away any privacy controls in order to catch criminal activity; companies that do not allow such regulation become subject to censorship. Regardless, it is no surprise to economists that China is where many media and social networking innovations flourish because of its exceedingly adaptable market. For example: while home internet is commonplace in the United States, in China the home subscriptions are much more expensive. Smartphones have become the most dominant realm of internet users and where many Chinese log onto social media sites. For application developers across the globe this is very good news. This China's smartphone trend, which is where many experts think personal computing is headed, is actually ahead of most other markets. Even in ahead of the United States.

Far from what might be portrayed in the media, censorship is not a new challenge for Facebook. In the past, Facebook has respected censorship and cultural norms when entering new countries: Germany's Facebook does not allow any symbolism of Nazism, Pakistan's Facebook does not allow any reproduction of the Islamic figure Mohamed. Will Zuckerberg do the same in China? Social media companies, more than anything, can be extremely vulnerable to linguistic and cultural differences when entering a new country. Qualitative foundations that are often layered within each society present challenges for systems designers to enable the data that will meet the needs of each country. Zuckerberg knows that Facebook may not remain dominant in the United States just on its own, and for his investors there must be solid proof of building future value to his empire. For Facebook, entering China may prove to be a smart move.

 

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