May 14, 2014 - 13:01 AMT
Facebook taking steps to open sales office in China: report

Facebook is taking steps to open a sales office in China to work with local advertisers, Bloomberg reported, citing people with knowledge of the matter, in a move that would put the social network’s employees in the country for the first time, even as its service remains censored there.

Facebook could open an office in China within a year to serve a growing set of customers in the country, said a person familiar with the situation, who asked not to be identified because the information is private.

Facebook is in discussions to lease space in Beijing’s Fortune Financial Center, located in the city’s central business district, according to other people familiar with the matter. The company hasn’t decided whether to hire contractors or full-time employees for a sales office, which would require an operating license, Bloomberg quoted another person with knowledge of the situation as saying.

“Today, our sales team in Hong Kong is supporting these Chinese businesses, but because of the rapid growth these businesses are achieving by using Facebook, we are of course exploring ways that we can provide even more support locally and may consider having a sales office in China in the future,” Facebook Vice President Vaughan Smith said in an e-mailed statement, however, declining to comment on the timing or location of a China office.

China has long been tough to crack for U.S. Internet companies. EBay Inc. and Yahoo! Inc., among others, have made little headway in the market. In 2010, Google Inc. said it wouldn’t comply with the country’s online censorship rules and shuttered its local search page. Twitter Inc. is also blocked in the country. LinkedIn Corp. recently said it plans to expand its Chinese-language website and will restrict some content to adhere to the country’s censorship rules.

“The government is still quite concerned about social instability,” said Shaun Rein, managing director at China Market Research Group in Shanghai. “I don’t think you are going to see any access for Facebook anytime soon.”

The absence of U.S. social media companies in China has spurred a boom of local Web firms. Sina Corp.’s Weibo, a Chinese service that works like Twitter, has more than 129 million monthly active users and went public in the U.S. last month. Tencent Holdings Ltd.’s WeChat, which would compete with WhatsApp, the messaging app that Facebook agreed to acquire for about $19 billion, has 355 million users.

Facebook is now working to boost sales from Asia, where the company made $354 million, or 14 percent of revenue, in the first quarter. That’s up from $118 million, or 11 percent, at the time of its May 2012 IPO.