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Is Whatsapp Facebook's Ticket Into China? Definitely Not.

Feb 21 2014, 4:51pm CST | by

Is Whatsapp Facebook's Ticket Into China? Definitely Not.
 
 

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Is Whatsapp Facebook's Ticket Into China? Definitely Not.

Facebook’s $19 billion acquisition of chat app Whatsapp turned quite a few heads when it was announced. And, as always seems to be the case when Facebook acquires a new company, people are already wondering if this will be the change that gives China a window into the world’s most populous country: China. It’s an interesting thought, but Facebook isn’t getting into China anytime soon, and Whatsapp won’t help.

The biggest reason is that Facebook is still Facebook. This is a service that the Chinese government linked what it considers to be a terrorist organization following what it considers to be an act of terrorism (the 2009 riots in Urumqi). At the time, state media claimed that more than 80 percent of China’s net users felt Facebook should be “punished” for its role in the riots and for refusing to delete the Facebook groups of Uyghur activists. That number is pretty misleading (readers of an extremely pro-government website were the only ones polled), but the point is that the government took a very strong position: Facebook is bad for China. Backing down from that, even years later, would be a loss of face.

Moreover, the government has no reason to back down from its Facebook ban. Domestic internet users are, by and large, not interested in using Facebook. Allowing the service to operate in China would only siphon money and talent away from China’s domestic social media industry and hurt domestic social platforms. From a government perspective, there’s no real reason to revisit the Facebook block anytime soon.

The acquisition of Whatsapp does nothing to change this. True, Whatsapp isn’t blocked in China, but it might as well be. It is completely overshadowed by WeChat, Tencent’s domestically-produced chat app, which absolutely dwarfs Whatsapp in terms of both users (it has nearly 300 million active users) and functionality. Comparing WeChat and Whatsapp in China isn’t even really fair, because it implies that they are competing on some level. They are not. WeChat is miles and miles ahead of Whatsapp. It would take something truly extreme—a miracle, really—to make Chinese users switch to Whatsapp at this point.

And of course, WeChat is also much more appealing to the Chinese government from an economic point of view. Tencent is, after all, a Chinese company, meaning that WeChat’s success creates domestic jobs and helps the Chinese economy. Plus, Tencent is subject to Chinese law, which means it’s pretty easy for the government to keep tabs on what’s being said on WeChat and prevent the app from being used as a tool for promoting dissent. Whatsapp, a foreign app, offers neither of these advantages, so even if it did somehow begin to gain users on WeChat, the Chinese government would have strong reasons to block it.

The only real appeal of Whatsapp in China would be to dissidents and would-be dissidents who are concerned about their conversations on WeChat being monitored by the government. Unfortunately, this audience is one that China’s government tracks closely (for obvious reasons), so it seems likely that if these users migrated to Whatsapp in order to have a more private platform to converse on, China would eventually block Whatsapp in response. Perhaps a small community could exist in the short-term before the block was implemented, but it is difficult for me to imagine any scenario in which Whatsapp would be able to build a significant audience in China over the long-term without getting blocked.

For the foreseeable future, I don’t think there’s any way for Facebook to make headway in China. Not through Whatsapp, not through Instagram, and not through any other future acquisitions, unless it buys a Chinese company directly. Mark Zuckerberg is clearly interested in the country, but the country (and more importantly its government) is just as clearly not interested in Zuckerberg.

Source: Forbes

 

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<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

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