Will Facebook’s $19 Billion WhatsApp Acquisition Allow it to Operate in China?

Microsoft and Facebook have officially ended their relationship again. 
(Image: Alvy/Flickr)
Microsoft and Facebook have officially ended their relationship again. (Image: Alvy/Flickr)

Facebook founder Mark Zuckerberg has struck a deal to buy WhatsApp for up to 19 billion dollars, including cash and stock shares. This has caused an uproar in the IT world. Many analysts think he’s paying too much.

For WhatsApp’s sole investor, Sequoia Capital, its initial investment of $60 million has turned into $3.2 billion, a return of over 50 times, and an unprecedented gain in the history of investments. Facebook will pay between $16 billion and $19 billion depending on the details, such as employee benefits.

Meanwhile, users of WhatsApp, an instant messaging system for smartphones, have been steadily climbing since the announcement.

Since the acquisition of WhatsApp, Facebook has marched a step closer to its “worldwide communication” goal. One point catching people’s attention—Facebook is banned in China, a market of 1.3 billion people, but Whatsapp is not—and WhatsApp already has a lot of Chinese users.

So can Facebook get into China through WhatsApp?

For Chinese users, what’s most important is that records of conversations will be managed and stored by a foreign agency.

Thus, it will cut down the risk of being “invited to tea” by a security bureau agent in China. That is the same reason why many Chinese use Google email accounts instead of Chinese providers.

For Facebook to reach its worldwide communication goal, it may face the same test that Google encountered in China in 2010. After acquiring WhatsApp, Facebook will have access to the world’s largest number of cell phone records, including all the most secret and intimate messages.

In the expansion of its market, Facebook may encounter tougher choices than those of Google regarding the issue of user privacy protection.

Will Facebook get into China due to its acquisition of WhatsApp, or be forced to leave?


Stabbing Attack on Kevin Lao and Hong Kong’s Media Freedom
6 Major Facets to China’s Financial System