LinkedIn's China bet starts paying off with increase in users

LinkedIn has doubled its Chinese user base to 8 million in the year since it set up a local subsidiary

LinkedIn has doubled its user base in China from 4 million to 8 million in the year since it agreed to comply with the country's rules on censorship.

Growth in China took off after the launch of LinkedIn's Chinese-language site, the U.S. business networking service said in its earnings report Thursday.

It's a positive sign for LinkedIn, when other U.S. Internet firms including Google and eBay have struggled to succeed in China. Fierce local competition and government regulation have often been tough roadblocks to overcome. For example, others sites such as Twitter and Facebook have been blocked for their potential to spread anti-government views to the Chinese populace.

In spite of the challenges, LinkedIn still decided to enter the market and in February of last year, it opened a beta site for the market. But in doing so, the U.S. company also agreed to abide by China's rules on censorship.

In LinkedIn's case, that's meant censoring controversial content for users based in China. This sparked complaints last year, when some users found that LinkedIn had blocked their posts relating to the pro-democracy Tiananmen Square protests of 1989.

In its defense, LinkedIn has said by entering the market, the company can help the country's people connect to career opportunities located in China and across the world. "Extending our service in China raises difficult questions, but it is clear to us that the decision to proceed is the right one," LinkedIn's CEO wrote a year ago.

The head of LinkedIn's China operations later added in April, "This is a very long-term investment, it's not an experiment."

So far, those efforts seem to be achieving some success, although 8 million users only represents a tiny amount of China's total Internet populace, said Mark Natkin, managing director for Beijing-based Marbridge Consulting.

Other Chinese Internet products, such as messaging app WeChat and payment service Alipay, have hundreds of millions of users in the country.

Many of these new LinkedIn users may speak English, and want to connect to career opportunities outside the country, Natkin added. But to court non-English speaking Chinese users, LinkedIn will have to do more to develop its local services. Otherwise, "your user base will become limited to those who are well educated, middle class, and white collar," he added.

On Friday, a LinkedIn spokeswoman elaborated and said since last February, 90 percent of its new users from the country have registered through its Chinese site.

LinkedIn has also recently received an ICP license from Chinese regulators, allowing the company to host Internet sites from within the country. This could help improve access speeds for Chinese users.

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Tags governmentregulationinternetLinkedInsocial networkingInternet-based applications and services

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Michael Kan

IDG News Service
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