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China – LinkedIn establishes local language website

25 February 2014

LinkedIn Corp. (LNKD) is establishing a Chinese-language website that will restrict some content to adhere to state censorship rules, moving further into a country where US technology companies have often clashed with the government, reports Bloomberg.com.

Derek Shen, President of LinkedIn China, wrote in a blog post yesterday that the California-based professional social-networking company is offering a new Chinese language version of its platform to provide a more localised service after more than a decade of having an English-language version in China . LinkedIn is also creating a joint venture with Sequoia China and China Broadband Capital to connect more than 140 million Chinese professionals.

LinkedIn said it has more than four million members in China, which is one of the company’s fastest-growing user bases.

LinkedIn Chief Executive Officer Jeff Weiner vowed to be transparent about how the company conducts business in China and said he will “undertake extensive measures” to protect member data.

In a LinkedIn post he wrote: “LinkedIn strongly supports freedom of expression and fundamentally disagrees with government censorship. At the same time, we also believe that LinkedIn’s absence in China would deny Chinese professionals a means to connect with others on our global platform, thereby limiting the ability of individual Chinese citizens to pursue and realise the economic opportunities, dreams and rights most important to them.”

China is a key piece of LinkedIn’s growth strategy, Mr Weiner said on a conference call with investors this month, after announcing a first-quarter sales forecast that missed analysts’ estimates. China has a population of 1.35 billion, more than quadruple that of the US, where internet penetration is already deep.

The company achieved USD 36.2 million in revenue, or 8.1% of their total revenue, from the Asia Pacific region in the fourth quarter, up from USD 22.8 million the previous year.

The absence of US social media companies in China has spurred a boom in copycat competition. Sina Corp.’s Weibo, a Chinese service that works like Twitter, has 60.2 million daily users in the country and is pursuing an initial public offering. However, there is so far no major professional networking site in China, leaving LinkedIn room for expansion, according to Erin Ennis, vice president of the US-China Business Council.

“They’ve got the beginnings of a client base for what their product does,” Ms Ennis said. When it comes to censorship, she added: “The realities of doing business in China are that you have to comply with the rules of doing business there.”