How LinkedIn China Outlasted Other US Tech Giants and Why It's Departing Now
October 21, 2021
American-born entrepreneur Danny Levinson estimates half of his LinkedIn
connections come from inside China. He has been using the social media platform
for four years and is involved in several China-based businesses that use
LinkedIn as one of their primary communication channels.
"On the business side, it's been a critical way to expand visibility," said
Levinson, 47, a Beijing-based head of technology at the seed investment firm,
But the China tech scene veteran was not surprised when LinkedIn's parent
company, Microsoft, announced last week it would pull the professional
networking service out of China, citing the Communist government's increased
oversight of its content.
The decision makes LinkedIn the latest foreign internet giant and the last major
American social media platform to lose parts of the giant market, following
blocks on the content of Facebook, YouTube and Twitter.
"What maybe was a surprise was how long it took them to make the decision [to
leave]," Levinson said. "They probably had more to lose by staying than
LinkedIn landed in China in 2014 and attracted 44 million Chinese users to its
network, according to the Statista database. The focus on job connections and
the backing of Microsoft, which had done two decades of research and development
in China, helped LinkedIn hang on longer than other American internet giants,
"There have been a number of occasions previously where I have thought it's
interesting that LinkedIn has made it this long in China, and ultimately
whenever I've thought that I've reminded myself it's about posting resumes and
posting recruitment notices largely, and those things are not particularly
problematic in China in terms of content," said Mark Natkin, managing director
with Beijing-based market research firm Marbridge Consulting.
"And it sounds from [LinkedIn's] statement that where things have become
problematic is exactly the type of content that is basically beyond that basic
kind of core function," he said, referring to LinkedIn's social feed and content
such as redistributed news articles.
Decision to pull out
Microsoft said last week it would close LinkedIn in China later this year. The
professional networking site had faced a "significantly more challenging
operating environment and greater compliance requirements," it said in an
October 14 blog post.
"Given this, we've made the decision to sunset the current localized version of
LinkedIn, which is how people in China access LinkedIn's global social media
platform, later this year," said the blog post.
LinkedIn also says it will focus on helping professionals find jobs in China —
and help Chinese companies with recruitment — by starting a service called
InJobs. InJobs, however, won't have a social feed or functions for sharing or
China has monitored the internet for two decades, from blocking websites to
filtering social feeds, with the goal of intercepting antigovernment material.
Its latest effort, the Data Security Law, restricts outflows of sensitive data
from China and requires internet operators to give their internal data to law
enforcement agencies, according to the American Chamber of Commerce in Shanghai.
Every multinational internet company doing business in China ultimately runs the
"significant risk" of hitting a censorship barrier, said Natkin of Marbridge
Consulting. Firms that do comply with China's rules may sometimes face criticism
from rights groups, shareholders and users in other parts of the world.
LinkedIn is not immune. Last month, the platform made the controversial move to
block several journalists' profiles from its China-based site because of
Behind in 'every metric'
difficult to know who's left in China to leave," said Zennon Kapron, founder and
director of Kapronasia, a Shanghai-based financial industry research firm. "I
think when you look at Google, Facebook — and Google's properties like YouTube
and Twitter — all these platforms are either blocked or have a lessened presence
But Levinson, like the Chinese nationals who work around him, said LinkedIn was
never his primay means of everyday communication. WeChat is the dominant chat
platform in China.
In the job search space, China's homegrown Maimai.cn, with a $1 billion
valuation, vies heavily with LinkedIn, said Ma Rui, founder of the U.S.-based
consulting firm TechBuzzChina. It's unclear, she said, whether InJobs will
absorb existing China-based LinkedIn profiles.
LinkedIn ultimately did not have "the right product for the China market." Ma
added, "given all the heat it's attracting for trying to adhere to Chinese
rules, it was just, like, unnecessary."