China Said to Quickly Pull Approval for Facebook’s Planned Venture

By Joyce Yu

Philadelphia, PA–Several hours after reports that Facebook had gained approval to open a subsidiary in Hangzhou City of Zhejiang Province, the company’s registration record disappeared from a Chinese government database. The latest development however seems to have little negative impact on Facebook’s shares while the market await its earnings report to be announced after market close.

A person familiar with the matter who declined to be named confirmed with the New York Times that the approval has been withdrawn. Facebook has yet confirmed or commented this news. Blocked in China for almost a decade, Facebook has always been hoping to enter the Chinese market and work with Chinese developers. CEO Mark Zuckerberg is making all his efforts to deepen relationship with China. He’s been learning the Chinese language for years, and was reported to have asked Chinese president Xi Jinping to suggest a Chinese name for his child during a state visit. His Mandarin-language question-and-answer session with students in China was widely publicized. Before the decision was reversed, it seemed a good re-start for Facebook in China with its proposed innovation hub in Hangzhou.

Comparing with Facebook’s China experience, Google is much more blessed. Pulling engines out of China in 2010, Google has recently made progress in the country, opening an artificial-intelligence center and releasing a game in the market. Last month Google announced to invest $550 million in the Chinese e-commerce company

The latest development, however, didn’t hit Facebook’s shares. On Wednesday, Facebooks shares drifted higher 0.5% to $215.79. When Facebook reports earnings after the bell today, investors will assess whether the Cambridge Analytica data scandal and other negative stories have driven users and advertisers away from the platform. Market expects Facebook to announce earnings of $1.72 per share, revenue of $13.36 billion. Global monthly active users is expected to reach 2.25 billion and global daily active users (DAUs) is estimated at 1.49 billion.

“Even if MAU and DAU show some weakness, Facebook has done an excellent job of becoming an indispensable communications platform,” Williamson told CNBC. “Simply put, it’s very hard to leave Facebook entirely. Perhaps people will share less often or become more careful about what they share, but we believe that it remains a very important platform for many people. And we also believe that engagement trends on Instagram as well as Messenger and WhatsApp will remain strong.”

Data from Forrester consumer research also showed while people know about Facebook’s data concerns, most people did not modify their usage patterns because of it.


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