As new reports emerged late last month that the US social
networking website Facebook.com has registered its Chinese domain
Facebook.com.cn and may announce its China foray by the end of this
year, there is little doubt about its determination.
But the second-largest American online community may have to be
wary of its Chinese move, as local competitors are ready to give it
a fight as serious as they gave Yahoo!, eBay, Google and
Myspace.
"We don't think Facebook will become our real threat here in
China," says Jack Zhang, president and CEO of Zhanzuo.com. "On the
contrary, few foreign Internet companies have done a great job in
China up to now and we are confident of our future
development."
Established in April 2006, Zhanzuo.com is regarded as one of the
largest social networking websites in China focused on college
students - the same users that Facebook is targeting. The website
now has 7 million active users and enjoys a good reputation among
Chinese students abroad.
"As China's economy develops, communication among people become
less close," he says. "In the future, we want to make Zhanzuo.com
not only as part of people's online life but also part of their
daily life."
Facebook also has competition from Xiaonei.com, which now claims
to have 8 million active users in almost 8,000 colleges and
universities in China.
Joseph Chen, CEO of Oak Pacific Interactive, the Chinese new
media conglomerate that acquired Xiaonei last year, refers to
Facebook as a "paper tiger", a famous remark borrowed from Chairman
Mao.
"Facebook can hardly become a success in China, since social
networking websites are culturally oriented, which means a
successful business models in the US may not work simply by copying
them to China," he says.
In fact, Zhang and Chen's remarks reflect the situation that
many foreign Internet companies have struggled in the Chinese
market although they have achieved great success globally.
In 2005, Yahoo! announced it would hand over its Chinese arm to
Chinese e-commerce giant Alibaba, putting an end to the company's
years of losses in the country. EBay, although entering China
through its acquisition of what was then the country's largest
auction website EachNet.com, was soon overtaken by Taobao.com.
Even Rupert Murdoch was no exception. Since his social
networking website Myspace.com began its Chinese version in April,
it did not receive the feverish welcome it did in the US.
"The development of Myspace in China is disappointing," says
Jack Zhang from Zhanzuo.com.
As America's largest social networking website, Myspace.com was
first originated by band fans enthusiastic about making friends
with their favorite band members and other music lovers on the
Internet.
But such an environment can hardly be found in China, as Chinese
Internet users are more willing to download music than make friends
on the Web with singers.
"In fact, Facebook was first used for US college students to
find party partners," says Zhang, who is a Yale MBA graduate. "But
in China, parties are simply not as popular."
He said that in US colleges, ties among students are much looser
than that in China.
Despite the criticism from local competitors, Facebook's China
entry is underway.
Earlier media reports say the company has registered its Chinese
domain and it is considering entering the Chinese market through
acquiring a local competitor.
The reports said Zhanzuo.com received a US$85 million buyout
offer from Facebook but turned it down.
Zhang refused to comment on the rumors, but an anonymous
employee from Zhanzuo.com says the two companies did have talks but
failed to clinch an agreement because of a disparity in
interests.
Insiders guess that Facebook may turn to court Xiaonei.com.
"We have a lot of respect for Facebook," says Zhang. "But we are
definitely not afraid of them."
(China Daily November 12, 2007)
