Since everyone is buzzing with excitement over the successful IPO for social networking pioneer Twitter (NYSE:TWTR), I thought I would end the week with a look at two other up-and-coming US Internet firms and their decidedly low-key approach to China. I'm talking about LinkedIn (NYSE:LNKD), the professional networking site, and Evernote, a cloud-based note-taking service. Neither of these two up-and-comers has made any high-profile announcements about their entries to China, even though both are active in the market. That could be a smart approach, following high-profile missteps by earlier arrivals that may have ultimately hurt their prospects in the large but also challenging market.
Perhaps it's appropriate to start off this look at LinkedIn and Evernote by beginning with Twitter, whose newly listed shares soared 73 percent on their trading debut on the New York Stock Exchange. Twitter and fellow social networking giant Facebook (NASDAQ:FB) have been blocked in China since 2009. In the run-up to its IPO, Twitter executives said China is not a priority for them in the near-term due to Beijing's strict requirement that site operators actively police themselves and remove any user generated content on sensitive subjects.
Reluctance to perform such self-policing ultimately led Google (NASDAQ:GOOG) to shutter its China-based search business in 2010. Facebook has said repeatedly that it wants to enter China, though it also has yet to find a formula or local partner that would satisfy both itself and Beijing.
LinkedIn says it hasn't entered China, even though it has an Asia headquarters in Singapore. Its main desktop-based business has no Chinese language interface. But I was recently surprised to get a LinkedIn "friend" request in Chinese, and soon learned that the company does in fact have a mobile app that supports Chinese language.
A company spokesman told me LinkedIn has operated the Chinese-language mobile app for some time now, and that the company currently has more than 3 million members in China. That certainly seems like a significant presence for a company that formally hasn't entered China, and I can certainly confirm that many of my Chinese friends have joined my network on LinkedIn's English-language service.
Evernote seems to be taking a similar low-key approach to China. It recently disclosed that a localized Chinese-language version of its cloud-based note-taking product, called Yixiang Biji, now has 8 million registered users and has recorded 20 million app installations. (English article) The company formally launched a storage business targeted at companies back in May, so it appears that the Yixiang Biji service is related to that.
In addition to their low-key approaches, observers also probably notice that both LinkedIn and Evernote are aiming their services at professionals and businesses, rather than more casual consumer users. That's important in China, since professionals and business customers are far less likely to engage in the kind of political activities and speech that often get web site operators into trouble in China.
The low-key approach by these two companies contrasts sharply with more high profile entries of other major web firms in past years. One typical case saw group buying site Groupon (NASDAQ:GRPN) formally launch a China joint venture in 2011, only to see the service flop and ultimately get merged with another company due to stiff competition. By taking this kind of lower-key approach targeting professionals and business customers, both LinkedIn and Evernote are boosting their chances for success in the market and minimizing the potential for conflicts with Beijing.
Bottom line: Low-key approaches to the China Internet market by Evernote and LinkedIn could stand better chances of success by lessening potential for conflicts with Beijing.