CHINA TOPIX

04/23/2024 03:14:03 am

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Why Microsoft, LinkedIn Merging A Potential Problem in China

 In this photo illustration, the LinkedIn logo is displayed on the screen of a laptop computer on January 27, 2011 in San Anselmo, California.

(Photo : Getty Images) In this photo illustration, the LinkedIn logo is displayed on the screen of a laptop computer on January 27, 2011 in San Anselmo, California.

Microsoft's plan to acquire business-oriented social networking service LinkedIn seems to face a problem in China because of the censorship law in the country.

Alyssa Abkowitz of the Wall Street Journal suggested that the merger may be complicated, because of the so-called Great Firewall, which permits the communist government to control the internet traffic in the country.

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LinkedIn, unlike other tech giants such as Google, Facebook, and Twitter, agreed to follow China's censorship rules and regulations, and the choice clearly paid off. Since its entry in 2014, its membership increased by over five times, thanks to 20 million users in China. 

However, with the recent deal LinkedIn's efforts to enter China may be compromised.

"LinkedIn could somehow be hampered by that relationship," Travis Wu, Beijing's Forrester Research vice president who used to work for Microsoft, said. "It was seen as independent but now it's part of a big machine and if the machine has issues with the government it could affect them."

Furthermore, WinBeta noted that Microsoft has been the target of China's State Administration for Industry and Commerce probes and raids since the country formulated a new set of anti-monopoly laws in 2008.

On the other hand, Microsoft insisted that LinkedIn will remain as a separate entity. A representative from the company reiterated that "LinkedIn will retain its distinct brand, culture, and independence" across all its locations, including China.

LinkedIn, however, refused to comment about the possible problem that could arise following the acquisition.

Last week, Microsoft agreed to buy LinkedIn for $26.2 billion in cash, its biggest purchase ever made. The deal sells at $196 per LinkedIn share.

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