Rumour: Facebook finally set to enter China – but who is its local partner?

Facebook may be set to enter the Chinese market after reportedly striking a deal with “a domestic website” according to a blog post from Ogilvy Asia chief Thomas Crampton.

According to Crampton the rumour was let out of the bag by Hu Yan Ping, manager and founder of Internet research center DCCI, who tweeted the following message (translated from Chinese in English by Crampton) through his Sina Weibo (Chinese version of Twitter) account yesterday:

“Facebook really is about to enter China, the agreement is signed. A domestic website will work with Facebook to create a new site. This new site is not interlinked with Facebook.com. Will this live or die in China?”

The message received 500 retweets and 178 comments in the first hour alone, but with no official response from Facebook or its mystery Chinese partner, it remains to be seen whether the rumour is true.

Kudos to Tom for breaking this rumour which has been picked up by TechCrunch and is making waves across the web.

On the rumour, TechCrunch Robin Wauters comments:

So which partnership, exactly, has been signed, at least according to YanPing? If the rumors check out, Facebook likely reached an agreement with Sina, the largest Chinese-language infotainment web portal, or Baidu, the Chinese search engine juggernaut, or perhaps both.Establishing a partnership with a local Internet giant would be the right way for Facebook to enter China in a way that appeases its restrictive government.

It’s also worth noting Facebook would still have to compete against the likes of Tencent’s PengYou and QZone, 51.com and RenRen and Kaixin001. Coincidentally, the latter is rumored to shoot for an IPO in the United States, the WSJ reported this morning.

While China-based consulting firm Marbridge goes further naming Baidu as the partner, citing a previous rumour of a meeting of the two firms in San Francisco earlier this year as further evidence of an agreement.

Multiple industry sources have revealed to Marbridge that online search giant Baidu is the “local Chinese Internet company” that will be working with Facebook and operating the new SNS website in China. In mid-February it was rumored that Baidu’s top management had visited Facebook’s headquarters in Silicon Valley (see “Rumor: Baidu Visits Facebook in Silicon Valley,” MD 2/18/11 issue.)

With no official comment from either parties, or in fact any companies, it remains to be seen whether there is truth to the rumour. However, of the many possible entries to the Chinese market, a separate, partner-led site is arguably the most logical, although many will claim Facebook is pursing financial gain and going against its principles by moving in to operate in China’s highly censored, internet space.

Facebook chief Mark Zuckerberg infamously spent time in China (and Thailand, attending a friend’s wedding) last year prompting rumours of a potential entry into the lucrative Chinese market where the world’s largest social network remains blocked.

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