6 ms·

China Wants To Buy Facebook Stock

61 points by taylorbuley 15y ago

mef 15y ago
The article confusingly states first that China's stake would not be influential, and then states that the apparent reason for China's interest is to have "control in the long run". Even if China's stake was influential, why would they need it in order to censor Facebook? They censor plenty of sites in which they have no stake whatsoever.
- esrauch 15y ago
  They are currently only able to completely block the website from China. If they can get an influential stake then they can have it open in China with back doors to block certain traffic/words and give law enforcement access to information on dissidents.
  - mef 15y ago
    Sure, but what motivation would they have to open it in China instead of just blocking it and propping up a Facebook-style Chinese site that they can surveil for free?
    - esrauch 15y ago
      Perhaps they could get access to information about people outside of China.
      - Locke1689 15y ago
        Doubtful. They're probably not even going to be stored in the same datacenters.
  - prostoalex 15y ago
    It's a dual-class stock structure, "an influential stake" is purely theoretical.
- joe_the_user 15y ago
  "Even if China's stake was influential, why would they need it in order to censor Facebook? They censor plenty of sites in which they have no stake whatsoever." Uh, to censor it in other countries?
- andymurd 15y ago
  I suspect that China does not want to censor or influence Facebook, but rather to co-opt its IP, as it has done with other US corporations (sometimes legally, sometimes not) - see Cisco, Google, GM, Microsoft. Holding a good-sized stake in FB is a great way to plant an inside man and gain access to that IP.
taylorbuley 15y ago
Thanks to whomever clarified title from "China Wants To Buy Facebook" to "China Wants To Buy Facebook Stock"
Shenglong 15y ago
Is it safe to say Facebook can probably double its userbase by going into China? Morality aside, this could be immensely profitable. More, Google has already backed out of China... so wouldn't it only make sense for Facebook to seize the opportunity to expand without Google+ competition?
jayp08 15y ago
I dont think that will happen ...unless facebook's only interest is to make bucket loads of money. If China does end up buying stake in fb, fb risks loosing a lot of existing users.
- wisty 15y ago
  Not really. China will get non-voting stock. I'd pay money to see a Chinese representative trying to explain to Mark "I'm the CEO, bitch" Zukerberg why their minority non-voting stock means Facebook MUST follow Chinese laws OR ELSE.
  - chernevik 15y ago
    They are trying every vector of influence. Maybe they're trying to work up to a board seat. That would give them strategic and operational insights that would help them monitor and censor. And, position them to co-opt any China entry under a "partnership". Also: Many Chinese are accustomed to considerable collusion and shady dealings among partners. Simply publicizing a stake could make many Chinese leery of FB, and less likely to use it politically.
- pavel_lishin 15y ago
  > ...unless facebook's only interest is to make bucket loads of money Aren't they a corporation? What other interest would they have? And Facebook is probably going to lose quite a few users to Google+ anyway - I can't think of anyone who would eschew Google+ for Facebook, but then suddenly quit because China invested.
pavel_lishin 15y ago
> A billion-dollar investment does not buy much influence in a site expected to be worth a hundred times that when it goes public. Really? Facebook is going to be worth a hundred billion dollars?
- tatsuke95 15y ago
  Give or take, that's the latest figure being tossed around. I believe the last second market buy-in was at a valuation of $87.5 billion, and that was in May (someone correct me if I'm wrong). Adding 10s of billions of implied market cap a quarter. The bubble knows no bounds. Interesting product, interesting stock. Regardless, does anyone else think this is going to go down as the biggest tech stock blunder in history? Can anything from 2000 touch this? It's madness, and infinitely intriguing.
  - nextparadigms 15y ago
    Last one was $70 bn. It dropped from about $85 bn. Even $70 bn is way too much for Facebook. I think their valuation grew more like a Ponzi scheme. Everyone thought it was going to have a higher value, so they invested more in it and told others about it. I remember it grew a few tens of billions basically overnight with bit tech sites claiming "..and Facebook's value grew another $5 billion this week". I think its value will start dropping fast by the end of the year, especially now with Google+ gaining traction.
    - esrauch 15y ago
      Google offered Groupon $6bn and they turned it down. Facebook is worth at least 10x as much as Groupon in my mind.
      - bad_user 15y ago
        Considering that Groupon is basically burning cash and that (until further evidence) their business model is unsustainable, I don't think that's a good example. People should really compare Facebook to Google. Google post-IPO was valued at a "bubbly" 27 billion in 2004. And take note that at that time Google already proved it had a viable business model; but people were still freaking out because Google only had one product, compared to what Microsoft or Yahoo had. Are you going to tell me that Facebook is worth three times as much as Google did in 2004?
hollerith 15y ago
The facts in OP lower my opinion of FB even more.
SystemOut 15y ago
Hey, if they can get a few billion dollars of China's cash at the current inflated valuation for non-voting stock who are we to criticize? They would need to somehow purchase very large blocs of voting stock to gain enough board seats to matter and that's not going to happen anytime soon. I think this is much ado about nothing.
mclin 15y ago
Is this going to help in any way to better clone facebook? http://www.renren.com http://www.renren.com
ph0rque 15y ago
Reminds me of this cartoon: http://i.imgur.com/9q7UL.gif http://i.imgur.com/9q7UL.gif
enjalot 15y ago
A lot of xenophobia in this article. The amount of data Facebook, Google and others are collecting on us is worrying when we think of what might happen if it gets into the "wrong" hands. Right now thoughts of China buying Facebook illicit this image easily in our western minds, but we should recognize this feeling as an admission that we don't really feel safe giving so much control to these companies. I haven't taken many active steps not to depend on them, but it's troubling whenever I think about what happens if a bad apple gets in the bunch. If I were to become a target of someone with access to Google or Facebook level data, there would be nowhere to run. I don't foresee becoming a target in the near future, so I haven't done much to 'liberate' myself or switch to open solutions. For now the services provided give me many more benefits than worries. I just wanted to point out that this article is playing on xenophobic fears and we should be careful of doublespeak.
- sliverstorm 15y ago
  *elicit
- esrauch 15y ago
  As far as I know no company has ever tracked down dissidents and imprisoned them. I'm not saying that you should exactly trust Facebook, but I think it is disingenuous to imply that you have just as much to fear from a crooked company as you do from a crooked government.
  - 18pfsmt 15y ago
    I find this interesting because I was just reading about these incidents from the early 20th century in the US: http://en.wikipedia.org/wiki/Ludlow_massacre http://en.wikipedia.org/wiki/Ludlow_massacre http://en.wikipedia.org/wiki/Battle_of_Blair_Mountain http://en.wikipedia.org/wiki/Battle_of_Blair_Mountain Both of these articles are about union struggles where the government intervened on behalf of corporations. These incidents have caused me to question how we treat various types of organisations [i.e. C-corps vs. 501(c)(3)] as they relate to society.
    - 15y ago
Apocryphon 15y ago
Looks like it's a shadow war between the CIA and the Guoanbu!
faragon 15y ago
Let's them buy it all, could be a win-win, as since 4-5 years ago, Chinese economy has an important bubble component, so they are theoretically "experts" handling those cases (/irony).
dedicated 15y ago
First the Russians buy into Facebook and now the Chinese too? All kidding aside, why would Facebook even want this to happen. It's not like they don't have enough investors out there waiting to throw money at them, who won't have potential conflicts of interest (censorship, surveillance) don't the road. And did the author actually mention MySpace as a potential destination for defecting FB users, without mentioning Google Plus?

61 points by taylorbuley 15y ago

mef 15y ago

The article confusingly states first that China's stake would not be influential, and then states that the apparent reason for China's interest is to have "control in the long run". Even if China's stake was influential, why would they need it in order to censor Facebook? They censor plenty of sites in which they have no stake whatsoever.

esrauch 15y ago
They are currently only able to completely block the website from China. If they can get an influential stake then they can have it open in China with back doors to block certain traffic/words and give law enforcement access to information on dissidents.
- mef 15y ago
  Sure, but what motivation would they have to open it in China instead of just blocking it and propping up a Facebook-style Chinese site that they can surveil for free?
  - esrauch 15y ago
    Perhaps they could get access to information about people outside of China.
    - Locke1689 15y ago
      Doubtful. They're probably not even going to be stored in the same datacenters.
- prostoalex 15y ago
  It's a dual-class stock structure, "an influential stake" is purely theoretical.
joe_the_user 15y ago
"Even if China's stake was influential, why would they need it in order to censor Facebook? They censor plenty of sites in which they have no stake whatsoever." Uh, to censor it in other countries?
andymurd 15y ago
I suspect that China does not want to censor or influence Facebook, but rather to co-opt its IP, as it has done with other US corporations (sometimes legally, sometimes not) - see Cisco, Google, GM, Microsoft. Holding a good-sized stake in FB is a great way to plant an inside man and gain access to that IP.

taylorbuley 15y ago

Thanks to whomever clarified title from "China Wants To Buy Facebook" to "China Wants To Buy Facebook Stock"

Shenglong 15y ago

Is it safe to say Facebook can probably double its userbase by going into China? Morality aside, this could be immensely profitable. More, Google has already backed out of China... so wouldn't it only make sense for Facebook to seize the opportunity to expand without Google+ competition?

jayp08 15y ago

I dont think that will happen ...unless facebook's only interest is to make bucket loads of money. If China does end up buying stake in fb, fb risks loosing a lot of existing users.

wisty 15y ago
Not really. China will get non-voting stock. I'd pay money to see a Chinese representative trying to explain to Mark "I'm the CEO, bitch" Zukerberg why their minority non-voting stock means Facebook MUST follow Chinese laws OR ELSE.
- chernevik 15y ago
  They are trying every vector of influence. Maybe they're trying to work up to a board seat. That would give them strategic and operational insights that would help them monitor and censor. And, position them to co-opt any China entry under a "partnership". Also: Many Chinese are accustomed to considerable collusion and shady dealings among partners. Simply publicizing a stake could make many Chinese leery of FB, and less likely to use it politically.
pavel_lishin 15y ago
> ...unless facebook's only interest is to make bucket loads of money Aren't they a corporation? What other interest would they have? And Facebook is probably going to lose quite a few users to Google+ anyway - I can't think of anyone who would eschew Google+ for Facebook, but then suddenly quit because China invested.

pavel_lishin 15y ago

> A billion-dollar investment does not buy much influence in a site expected to be worth a hundred times that when it goes public. Really? Facebook is going to be worth a hundred billion dollars?

tatsuke95 15y ago
Give or take, that's the latest figure being tossed around. I believe the last second market buy-in was at a valuation of $87.5 billion, and that was in May (someone correct me if I'm wrong). Adding 10s of billions of implied market cap a quarter. The bubble knows no bounds. Interesting product, interesting stock. Regardless, does anyone else think this is going to go down as the biggest tech stock blunder in history? Can anything from 2000 touch this? It's madness, and infinitely intriguing.
- nextparadigms 15y ago
  Last one was $70 bn. It dropped from about $85 bn. Even $70 bn is way too much for Facebook. I think their valuation grew more like a Ponzi scheme. Everyone thought it was going to have a higher value, so they invested more in it and told others about it. I remember it grew a few tens of billions basically overnight with bit tech sites claiming "..and Facebook's value grew another $5 billion this week". I think its value will start dropping fast by the end of the year, especially now with Google+ gaining traction.
  - esrauch 15y ago
    Google offered Groupon $6bn and they turned it down. Facebook is worth at least 10x as much as Groupon in my mind.
    - bad_user 15y ago
      Considering that Groupon is basically burning cash and that (until further evidence) their business model is unsustainable, I don't think that's a good example. People should really compare Facebook to Google. Google post-IPO was valued at a "bubbly" 27 billion in 2004. And take note that at that time Google already proved it had a viable business model; but people were still freaking out because Google only had one product, compared to what Microsoft or Yahoo had. Are you going to tell me that Facebook is worth three times as much as Google did in 2004?

hollerith 15y ago

The facts in OP lower my opinion of FB even more.

SystemOut 15y ago

Hey, if they can get a few billion dollars of China's cash at the current inflated valuation for non-voting stock who are we to criticize? They would need to somehow purchase very large blocs of voting stock to gain enough board seats to matter and that's not going to happen anytime soon. I think this is much ado about nothing.

mclin 15y ago

Is this going to help in any way to better clone facebook? http://www.renren.com http://www.renren.com

ph0rque 15y ago

Reminds me of this cartoon: http://i.imgur.com/9q7UL.gif http://i.imgur.com/9q7UL.gif

enjalot 15y ago

A lot of xenophobia in this article. The amount of data Facebook, Google and others are collecting on us is worrying when we think of what might happen if it gets into the "wrong" hands. Right now thoughts of China buying Facebook illicit this image easily in our western minds, but we should recognize this feeling as an admission that we don't really feel safe giving so much control to these companies. I haven't taken many active steps not to depend on them, but it's troubling whenever I think about what happens if a bad apple gets in the bunch. If I were to become a target of someone with access to Google or Facebook level data, there would be nowhere to run. I don't foresee becoming a target in the near future, so I haven't done much to 'liberate' myself or switch to open solutions. For now the services provided give me many more benefits than worries. I just wanted to point out that this article is playing on xenophobic fears and we should be careful of doublespeak.

sliverstorm 15y ago
*elicit
esrauch 15y ago
As far as I know no company has ever tracked down dissidents and imprisoned them. I'm not saying that you should exactly trust Facebook, but I think it is disingenuous to imply that you have just as much to fear from a crooked company as you do from a crooked government.
- 18pfsmt 15y ago
  I find this interesting because I was just reading about these incidents from the early 20th century in the US: http://en.wikipedia.org/wiki/Ludlow_massacre http://en.wikipedia.org/wiki/Ludlow_massacre http://en.wikipedia.org/wiki/Battle_of_Blair_Mountain http://en.wikipedia.org/wiki/Battle_of_Blair_Mountain Both of these articles are about union struggles where the government intervened on behalf of corporations. These incidents have caused me to question how we treat various types of organisations [i.e. C-corps vs. 501(c)(3)] as they relate to society.
  - 15y ago

Apocryphon 15y ago

Looks like it's a shadow war between the CIA and the Guoanbu!

faragon 15y ago

Let's them buy it all, could be a win-win, as since 4-5 years ago, Chinese economy has an important bubble component, so they are theoretically "experts" handling those cases (/irony).

dedicated 15y ago

First the Russians buy into Facebook and now the Chinese too? All kidding aside, why would Facebook even want this to happen. It's not like they don't have enough investors out there waiting to throw money at them, who won't have potential conflicts of interest (censorship, surveillance) don't the road. And did the author actually mention MySpace as a potential destination for defecting FB users, without mentioning Google Plus?