Mattel's Barbie market isn't the only business venture that failed in China. Many a business have foolishly walked into the market with high hopes and left with their tail between their legs. Will Facebook be next to take the dreaded walk of shame?
Rumor has it, Facebook, which needs no introduction, has plans to enter China's market by teaming up with Baidu
But wait, isn't Facebook blocked in China? Why yes, yes it is, but apparently this minor roadblock can be avoided: The brainchild of Facebook and Baidu will not be integrated with the rest of the Facebook's global access.
This has to do with China's extraordinary internet regulations, the same "that defeated other Western internet giants like Google, Yahoo!, eBay, Amazon, and Twitter." In that respect, one of the appeals to partnering with Baidu is that the company "has one of the best relationships with the government in terms of how they deal with media censorship," according to T.R. Harrington, founder and CEO of Darwin Marketing. It's possible this bond could give Facebook the helping hand that other failed business ventures lacked.
And sure, the appeal of China is understandable, Facebook has over 750 million users on the global market, and it's already growing in other Asian markets. China's massive internet user population could mean serious business. Furthermore, as "Thoughtful China" host Trevor Lai puts it, "can any company's global strategy truly be complete without China?
But when it comes down to the services Facebook provides, China already has their fair share of successful and established social media sites, "such as RenRen, Kaixin001, Qzone and 51.com, Tencent's QQ instant-messenger platform and Sina's red-hot microblogging service Weibo" (via Adage). Facebook's new venture won't even be allowed to integrate the China with "The Rest of the World," so it's not even breaking new ground.
In fact, many analysts and social market experts believe Facebook is simply too late to take a significant hold on the market. On some level, you have to wonder whether this is worthwhile for Facebook.
And more to the point, will it work where others have failed? To help you understand Facebook's competition in the social media market, we list below the Chinese internet companies with an exposure to these trends:
List sorted alphabetically. (Click here to access free, interactive tools to analyze these ideas.)
1. Baidu: Internet Information Providers Industry. Market cap of $57.33B. Current price at $161.06. Exhibiting strong upside momentum -- currently trading 9.72% above its SMA20, 19.04% above its SMA50, and 31.24% above its SMA200. The stock has had a couple of great days, gaining 7.73% over the last week.
Baidu, formerly Baidu.com, is a Chinese-language Internet search provider and is based in Beijing, the People's Republic of China.The company offers a Chinese language search platform and conducts its operations principally through Baidu Online Network Technology Co., a network of third-party websites and software applications. Further, the company offers Japanese search services, including Web search, image search, video search, and blog search capabilities. It also offers online marketing services to its customers directly and through other distribution networks.
2. Ctrip.com International
Ctrip.com International is a leading travel service provider of hotel accommodations, airline tickets and packaged-tours in China. Ctrip aggregates information on hotels and flights and enables customers to make informed and cost-effective hotel and flight bookings. Ctrip targets primarily business and leisure travelers in China who do not travel in group. These travelers form a traditionally under-served yet fast-growing segment of the China travel industry. Ctrip has experienced substantial growth and become one of the best-known travel brands in China.
3. E-Commerce China Dangdang
E-Commerce China Dangdang is engaged in operating as a business-to-consumer business providing on line shopping in China. Products offered by the Company's website dangdang.com include books media products beauty and personal care products, home and lifestyle products, and baby, children and maternity products. The company is primarily focused on retailing of books in both Chinese and foreign languages. E-Commerce China Dangdang Inc is headquartered in Beijing, China.
4. The9 Limited
The9 Limited operates massively multiplayer online role playing games (MMORPGs) and other games that it owns or in-licensees in China. The Company offers online games, including MMORPGs and its self-developed online community game, the9 City, which the Company offers in cooperation with Shanghai The9 Information Technology Co., Ltd. (Shanghai IT). In addition to MMORPGs, it has licensed or developed casual games. Its other products and services include game operating support, Website solutions and advertisement services, system management services (SMS) and sales of its Pass9 system. In February 2009, it acquired 20% interest in Fire Rain Network Technology Co., Limited (Fire Rain).
Netease.com is one of the leading Internet companies in China. The company's web site provides an intimate community setting for millions of registered Chinese users. Members of its web site community enjoy access to free web-based E-mail, Online auctions, Online chat rooms, Personalized web sites, Instant messaging, Web hosting, as well as E-commerce services. Also, the company offers easily accessible Content Channels, putting its users in instant contact with all of the latest in news and online media.
6. Sina Corp.
SINA Corporation is a leading online media company and value-added information service provider for China and for global Chinese communities. With a branded network of localized web sites targeting Greater China and overseas Chinese, SINA operates three major business lines including SINA.com, SINA Online and SINA.net, providing an array of services including online portals, premium email, wireless short messaging, virtual ISP, search, classified information, online games, e-commerce, e-learning and enterprise e-solutions.
7. Shanda Interactive Entertainment
Shanda Interactive Entertainment Limited is a leading interactive entertainment media company in China. Shanda offers a portfolio of diversified entertainment content including some of the most popular massively multi-player and casual online games in China, along with online chess and board games, network PC games and a variety of cartoons, literature works and music. Shanda's interactive entertainment platform attracts a large and loyal user base, of which more and more is coming from homes. Each user can interact with thousands of others and enjoy the interactive entertainment content that Shanda provides. Interaction enriches your life.
Sohu.com Inc. is a leading Internet portal in China in terms of brand recognition, page views and registered users. The company's portal consists of the following: Chinese language Web navigational and search capabilities, 12 main content channels, Web-based communications and community services, and a platform for e-commerce services. The company is well positioned to capitalize on the emergence of the Web as a new advertising medium and commerce platform in China.
Youku.com operates as the provider of video content through its internet television platform in China. The company's website enables consumers to search, view and share video content across multiple devices. The video content on Youku's website is professionally produced content, such as television serial dramas, movies, variety shows, current events reports and music videos; and user-generated content and in-house productions. The company licenses video content at fixed rates for a specified term. It also offers advertising solutions to brand advertisers. Youku.com is headquartered in Beijing, the Peoples' Republic of China.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Becca Lipman does not own any of the shares mentioned above.
The Motley Fool owns shares of Yahoo!, Google, and Ctrip.com International. Motley Fool newsletter services have recommended buying shares of Sina, eBay, Yahoo!, Amazon.com, NetEase.com, Ctrip.com International, Sohu.com, Baidu, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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