Though I have a good bet on how long the current Chinese regime will last, any business should not make their decision based on political changes. It has a great uncertainty on which political disturbance will turn into storm. Thus, business should never be a leader of political change, rather, they should prepare for it, but only be the follower of political change. From that perspective, it is important for Facebook to enter China now than any time later. But, from the past experience, there are a few things Facebook can do better than its predecessors.
**1. Don’t incorporate with local companies **
It never works to incorporate with local companies. Mostly, if you incorporate with established company, you will be screwed up sooner or later. That happened to McDonnell Douglas, it will happen to anyone. It is always a good rule of never trusting any local cooperators or any contracts with them. It is common to use power (political or money) rather than law & contract to secure your business. However, it is OK to buy a local company. Yes, Ebay China is an epic failure, but it was more due to the inability of local management rather than the purchasing decision. Yahoo China is doing good in terms of financial outcome (Alibaba generates tons of money for them). I won’t call Amazon China a success, but they are in good shape today. It will cost Facebook much less to purchase a local company in China rather than grow the user base all by themselves (Facebook is not in a good time to acquire social network user from scratch). It should be made clear that the sole purpose of the purchasing is to acquire user base and some local sales/engineering forces rather than the product.
2. There are rainmakers and they work
Goldman Sachs has a deep connection with rainmakers in China. With these connections, Facebook can pitch to elders that they can do censorship and be willing of doing it, through a different strategy. It would be a good take if local rainmakers in China become share-holders with Facebook through Goldman Sachs. The aligned interests may give Facebook a very good up-take.
3. The censorship strategy
The most valuable asset of Facebook is people on it. It would be very unwise to have a local Chinese version that isolated with main site. The Facebook China site should be able to make friend requests to main site users, view and install 3rd party applications of main site and view pages of main site, all with self-censorship system. It wouldn’t be that hard technically speaking. The China site can be built upon Facebook Platform API (possibly do some relay through unblocked IPs), and the censorship system can be deployed in China site end without compromising any main site functionalities. Any 3rd party applications interested in Chinese market can be deployed with a simple geographical detector that redirects to different login page if the IP comes from China. It is very valuable for Facebook to provide Platform API to local Chinese companies as well.
4. It is not always bad to partner with local companies
Partnership with local companies is not always bad. Google’s several local partnership turns out to be beneficial before its disrupts with Chinese government. You should be extremely careful, but it can be a good thing. I’d imagine that Sina’s microblogging service would be very excited about using Facebook Connect, so does thousands of other Chinese websites.
5. Be patient
Though it is possible to circumventing the censorship restrictions, Chinese government can be troublesome - they change their attitudes all the time. It would take Facebook years to catch up with their local competitors in terms of service quality. But it is much important to establish existence alone in China.