Facebook in China

1
Facebook in China?

• Not So Fast

2
Facebook Background

• Social Networking Site launched in 2004
• Founded by Mark Zuckerberg
• 55 million active members
• Largest number of users among college focused
  sites
• The 1 site for photos!

3
Facebook Background

• Key Features
• The Wall
• Pokes
• Status
• Events
• Gifts
• Facebook Marketplace
• Facebook Applications
• Over 6,500 applications
• Altura 1 Facebook Investment Fund
• Facebook Video

4
Facebook News History

• 2006Opens network for all users
• 2007Launched Facebook Marketplace
• Compete with Craigslist
• 2007Recent Microsoft investment
• 1.6 stake for 240 million

5
Challenges

• Blocking Access
• Schools
• Organizations
• Customization and Security
• Not on par with Myspace
• Legal
• Illegal use of concept and source code

6
Competition

• Domestic
• Myspace
• Friendster
• Hi-5
• Foreign
• Ziaonei
• Taiwonig
• Zhanzuo

7
Article Summery

• Facebook in China? Not So Fast

8
Market Potential in China

• Chinese Market
• Over 160 million Chinese online
• Second largest online population after the U.S.
• Internet penetration now surpassing 10
• After passing the 10 mark growth is usually
  exponential
• Giving American companies the chance to grow if
  they can localize in China successfully

9
Potential Market Barriers

• Already saturated market
• Over 100 social Networking sites already in China
• Xiaonei (Chinese social networking site)
• Has 70 of the market
• Now opening networks to high school students and
  white collar workers
• Myspace recently started Myspace China
• Gotten off to a very slow start

10
Strategies to Enter Chinese Market

• Gradual influx into the market
• Companies such as Google, Yahoo, and eBay have
  had trouble getting into the Chinese market
• Friendster
• Did not set up operation in China, instead
• It offers Chinese-language services from its
  U.S.-based servers
• Allowing them to focus on its Chinese strategy
  gradually
• Has one of the best American ideas,
• slowly making their core services more and more
  comfortable with Chinese people

11
Marketing Implications

• Financial backing from Microsoft gives Facebook a
  lot of options for penetrating the Chinese
  market.
• Myspace proved that saturation and clutter in the
  target market (China) will make it difficult to
  be headstrong and jump right in.

12
Reccomendations

• Best entry strategy for Facebook would be to
  aquire an already-established social networking
  company in China
• Xiaonei A popular social networking group with
  many similarities to facebook including
• Signature Color
• User Interface
• Functionalities
• Facebook has a lot to offer Xiaonei users and a
  lot of market share to gain from its
  acquisition.

13
Any Questions?