Facebook has not signed China deal: source

SAN FRANCISCO Mon Apr 11, 2011 3:41pm EDT

Facebook Founder & Chief Executive Officer Mark Zuckerberg, launches Facebook's ''open compute program'' at Facebook's headquarters in Palo Alto, California April 7, 2011. REUTERS/Norbert von der Groeben

Facebook Founder & Chief Executive Officer Mark Zuckerberg, launches Facebook's ''open compute program'' at Facebook's headquarters in Palo Alto, California April 7, 2011.

Credit: Reuters/Norbert von der Groeben

SAN FRANCISCO (Reuters) - Facebook is evaluating the Internet market in China, but the social networking giant has not signed a business deal with any companies there, a source familiar with the matter told Reuters.

Shares of Chinese Internet company Baidu Inc rose more than 4 percent to $147.93 in Monday U.S. trade after media reports that Facebook and Baidu had formed a partnership.

Facebook, which has more than 500 million users, has been banned since 2009 in China, where the government exercises tight control over online information. The company opened a sales office in Hong Kong this year.

"Frenzied options trading ensued at Baidu today on reports the owner of China's most-used search engine signed an agreement with Facebook Inc to set up a social networking website in China," said Interactive Brokers Group options analyst Caitlin Duffy in a note to clients.

Baidu's overall options activity was 2.3 times greater than average daily levels with about 112,000 calls and 45,000 puts traded by 2:55 p.m. EDT, according to option analytics firm Trade Alert.

Facebook said in a statement on Monday that the company is "currently studying and learning about China, as part of evaluating any possible approaches that could benefit our users, developers and advertisers."

Chief Executive Mark Zuckerberg toured China last December, visiting the heads of numerous Chinese Internet companies including Baidu, Sina Corp and Alibaba Group.

According to recent reports in the Chinese media, some of which were picked up by popular U.S. technology blogs including Business Insider, Baidu and Facebook have struck a joint venture to create a new social network in China that would not involve Facebook.com.

(Additional reporting by Doris Frankel; Editing by Phil Berlowitz and Steve Orlofsky)

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Comments (1)
Pterosaur wrote:
China already has QQ. Its market share is 100%. It has all the functions that Facebook provides and much more other features that FAcebook does not provide. More importantly, it follows Chinese laws and guidelines instead going there trying to teach the Chinese some Western philosophy. I don’t see how Facebook can compete with QQ.

Apr 11, 2011 7:37pm EDT  --  Report as abuse
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