Facebook quietly tests Chinese market with stealth app

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Facebook and many of its apps have been blocked in China for years. To change that, Mark Zuckerberg has made a big point of meeting with Chinese politicians, reading stodgy Communist Party propaganda, studying Mandarin and – perhaps more daunting – speaking it in public.

Now the social network is trying a different way into China: by authorising the release of a new app there that does not carry the Facebook name.

Facebook approved the May debut of a photo-sharing app, called Colorful Balloons, in China, according to a person with knowledge of the company’s plans, who declined to be named because the information is politically sensitive.

The app, which has not previously been reported, shares the look, function and feel of Facebook’s Moments app. It was released through a separate local company and without any hint that the social network is affiliated with it.

The stealthy and anonymous release of an app by a major foreign technology company in China is unprecedented. It shows the desperation – and frustration – of global tech companies as they try to break into the world’s largest online market. It also underscores the lengths they are willing to go, and their increasing acceptance of the idea that standards for operating in China are different from elsewhere.

China boom

China’s internet censorship has left big players like Facebook and Google on the sidelines of a major boom there. The country boasts an audience of more than 700 million internet users who buy $US750 billion ($950 billion) of stuff online a year, but they are served by local tech companies that have developed their own way of doing business that can seem exotic to Silicon Valley.

Facebook hopes it can learn and potentially assimilate those ways. Yet the social network was banned in China in 2009, followed by its photo-sharing app Instagram in 2014, and its messaging app WhatsApp was partially blocked last month.

While the company has more than 2 billion users around the world, Zuckerberg, Facebook’s founder and chief executive, has often asked where its next billion users will come from.

Now Colorful Balloons gives the Silicon Valley company a way to see how Chinese users digitally share information with their friends or interact with their favorite social media platforms.

Different approaches

“We have long said that we are interested in China, and are spending time understanding and learning more about the country in different ways,” Facebook said in a statement.

It is unclear whether China’s various internet regulators were aware of the app’s existence. The under-the-table approach could cause Facebook new difficulties with a Chinese government that has maintained strict oversight and control over foreign tech companies.

“It’s not a mere business thing,” said Teng Bingsheng, a professor of strategic management at Cheung Kong Graduate School of Business. “It’s politics.”

The Cyberspace Administration of China did not respond to a faxed request for comment.

Before the release of Colorful Balloons, Facebook had taken an unusually high-profile approach to courting China.

Courting China

Zuckerberg had paid a series of visits to the country in recent years and become something of a celebrity there. Videos of him speaking Mandarin have gone viral, as did a photo of him jogging on a dangerously smoggy day through Tiananmen Square in Beijing.

Colorful Balloons represents the opposite approach – one that is low profile.

The app was released in China by a company called Youge Internet Technology, according to a post in Apple’s app store. It is registered to an address in eastern Beijing, yet the room number listed in company registration documents could not be found amid a series of shabby, small offices on the building’s fourth floor.

According to the documents, Youge’s executive director is a woman named Zhang Jingmei. She appeared in a photo of a recent meeting between Facebook and the Shanghai government, sitting next to Wang-Li Moser, a Facebook executive whose responsibilities include building up the company’s relationship with the Chinese government. Zhang’s presence at such a high-level meeting indicated she is likely a Facebook adviser or employee.

Facebook declined to comment on Zhang’s relationship to the company, and Zhang did not respond to phone calls requesting comment.

High risk

If Facebook did little to promote Colorful Balloons in China, it did work to tailor the app to a local audience. In the rest of the world, the company’s Moments app connects users through Facebook. Colorful Balloons instead links users through China’s biggest social network, WeChat.

The app, which is designed to collate photos from a smartphone’s photo albums and then share them, does so in China with the use of a QR code, a sort of bar code that is widely used by WeChat and other apps in the country.

While photos can be shared, Facebook appears to have taken steps to ensure the app could not spread widely. For example, people who post photos from Colorful Balloons on WeChat will see a link that lets other users download Facebook’s Chinese app. But the link does not work, meaning people have to seek out Colorful Balloons in an app store instead of grabbing it from their friends, which may limit its distribution.

The risk Facebook is taking with the new app is high. The company appears to have handed over a fully functioning product to Youge for release, and has done so without indicating in any public way that it is connected to Facebook. Coming just ahead of a key meeting of the Chinese Communist Party this autumn, the secretive release of Colorful Balloons could also undermine trust between the company and the Chinese government.

by Paul Mozur
Australia Financial Review

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