

China Wants To Buy Facebook Stock - taylorbuley
http://blogs.forbes.com/gordonchang/2011/07/03/china-wants-to-buy-facebook/

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enjalot
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.

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esrauch
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
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/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.

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esrauch
Thanks for the links.

I do think it's relevant that a corporation that has that kind of clout with
the government is something you should be just as afraid of as branches of the
government themselves, but I still feel like the potential for abuse by
Facebook and the Chinese government is not even close.

~~~
18pfsmt
I agree with you completely wrt China/FB. However, given your comment's
assertion, I thought you might find the stories of those incidents interesting
as I did.

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SystemOut
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.

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mef
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.

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esrauch
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
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
Perhaps they could get access to information about people outside of China.

~~~
Locke1689
Doubtful. They're probably not even going to be stored in the same
datacenters.

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jayp08
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
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
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.

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ph0rque
Reminds me of this cartoon: <http://i.imgur.com/9q7UL.gif>

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pavel_lishin
> 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
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
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
Google offered Groupon $6bn and they turned it down. Facebook is worth at
least 10x as much as Groupon in my mind.

~~~
bad_user
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?

~~~
qq66
It's challenging to compare an Internet company in 2011 to a freeze-frame of
one in 2004.

The better comparison is to Google today, which is worth $171B. Is Facebook
worth 2/3 as much as Google? It certainly could be, since if it assaults
Google head-on in an ad network, given certain other assumptions it could
capture a huge market position.

~~~
nextparadigms
Facebook makes 4 billion in revenue. Google makes I think about 7x more. And
from what I heard Facebook ads aren't very effective.

~~~
qq66
I'm talking about an ad network. Like AdSense. They haven't done that yet, so
revenue projections for what it would be are just guesswork.

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Shenglong
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?

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dedicated
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?

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

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

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faragon
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).

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

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

