UPDATE 1-LinkedIn access in China disrupted amid protest calls

Thu Feb 24, 2011 11:00am EST

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(Adds details)

BEIJING, Feb 24 (Reuters) - Access to the professional networking site LinkedIn was disrupted in China on Thursday, following online calls on other sites for gatherings inspired by protests against authoritarian regimes across the Middle East.

Many users in China were unable to access LinkedIn, which is planning an initial public offering set to raise up to $175 million.

LinkedIn could be accessed as recently as Thursday morning, according to two regular users, one a Reuters employee and the other a business consultant, who declined to be identified.

Some users who later found they could not access it via the Chinese Internet said the site was however accessible via routes outside the reach of Chinese censors.

LinkedIn, with its relatively small user base of adult professionals, has been accessible in China through the local Internet service, unlike Facebook and other social websites with much larger numbers of users.

ANXIETY

The news of the disruption coincided with a rash of detentions and tighter censorship in recent days, underscoring the government's anxiety in the face of calls for "Jasmine Revolution" protests -- pro-democracy gatherings inspired by unrest in the Middle East. [ID:nTOE71N05Z]

If the disruption for LinkedIn is permanent in China, it could hurt the company's prospects at an IPO as a ban would exclude the company from the world's largest Internet market -- about 450 million users and growing.

"It certainly would be a negative in terms of the company's future growth and profitability," said Jay Ritter, a professor of finance at the University of Florida.

"This is something where investors would take it into account and be willing to pay a little lower price per share."

LinkedIn Corp, which filed last month to raise up to $175 million in an IPO either on the Nasdaq or the New York stock exchange, was not immediately available for comment.

The Chinese Communist Party worries that the Internet could become a conduit for images and ideas that could challenge its one-party rule.

China already blocks a number of popular websites, including other social networking sites such as Facebook and Twitter, and Google's (GOOG.O) YouTube.

LinkedIn, which runs a networking site geared towards professionals and boasts 90 million users, was the first social networking company to start the process of becoming publicly traded.

China has tussled with foreign Internet companies before, including a high-profile dispute with Google (GOOG.O). After a months-long stand-off over censorship, China finally gave the company approval last July to keep operating its Chinese search page.

LinkedIn's investors include Greylock Partners, Bessemer Venture Partners, Goldman Sachs Group Inc (GS.N) and Sequoia Capital, a venture capital firm that has backed Yahoo Inc (YHOO.O), Google, Apple Inc (AAPL.O), Cisco Systems Inc (CSCO.O) and Oracle Corp ORCL.O. (Reporting by Chris Buckley, Sui-Lee Wee, Michael Martina and Don Durfee in BEIJING, Clare Baldwin in NEW YORK and Brenton Cordeiro in BANGALORE; editing by Don Durfee and Andrew Roche)

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