Network reduction

Users got an unwelcome update

Like many of the world’s top social media brands, LinkedIn has a noble vision. In its case the commitment is to creating economic opportunity for ‘everyone’ in the global workforce. That looked like a tougher task when it announced it was logging out of the Chinese market (which mathematically represents a fifth of ‘everyone’) last week.

Blaming a “significantly more challenging operating environment and greater compliance requirements”, the company said it will switch to a new site developed specifically for the local market. But the message the international media took from the announcement was that the new platform won’t allow its users to post content or share articles or links. These changes mean LinkedIn’s status as the sole ‘global’ social media survivor in China have been skewered, signalling the departure of the last of the US giants from the space.

Twitter, Facebook and YouTube have been blocked in China for years, while Google chose to leave more than a decade ago. LinkedIn hung around, trying to comply with local regulations by launching a Chinese version of its networking site in 2014 that utilised algorithms and human reviewers to pick out posts that might offend Beijing.

However, the struggle to stay in line with the rules has been getting harder – even for a more business focused platform. Chinese regulators hauled internet bosses over the coals in March for failing to do more to curtail offending content, giving them a 30-day deadline to improve. Microsoft, which bought LinkedIn in 2016 for more than $26 billion, was also called out this summer for “improper data collection”.

In a taster of changes that would have added new costs and complexities to LinkedIn’s operations, new legislation is demanding further protections for personal information and data security, while there’s an expanding focus on the kind of algorithms that serve up content and suggest connections.

LinkedIn has to handle increasingly sceptical sentiment in the US about bending to Chinese demands as well, including 42 requests to remove content from the platform last year. There were rebukes in its home market again when it blocked the profiles of a group of American academics and journalists last month, apparently at Beijing’s request.

In this respect LinkedIn could be classed as another casualty of worsening relations between Washington and Beijing, which have made it more difficult to tread the tightrope between the rival jurisdictions. Now it has given up the effort and chosen a newer path with less risk of angering either government.

Helping that decision: China wasn’t a major market for sales. Despite more than 50 million LinkedIn users, the country only contributes about 2% to Microsoft’s revenues. That wasn’t enough to justify the political and reputational risks to the company in some of its other markets. “For some, compromises made to continue operating in China will be financially necessary; for LinkedIn they became unsustainable,” the Financial Times warned in an editorial.

The departure is still being lamented for closing off one of the few channels through which Chinese users could interact with foreign people without relying on software that skirts the country’s internet firewall. Others described the exit as another sign of the growing separation between China and the rest of the world.

Yet the change in strategy won’t have a seismic impact on Chinese social media. It might disappoint the main groups that did use the platform (companies trying to make contact with overseas customers and university graduates wanting to make careers connections or for further study overseas). But LinkedIn hadn’t made major inroads into the wider Chinese market of jobseekers.

Indeed, the new efforts to build up an “independent” jobs platform will bring it into direct competition with local rivals like Maimai, which boasts more than twice the number of users and a much more active community online. Chinese netizens were soon picking up on these user statistics, claiming that competition from local players was the real reason for the decision for the US social media platform to scale back. “Amazon was beaten down by Taobao and JD.com; and LinkedIn is less popular than Maimai,” one of its domestic critics scoffed. “Is that what’s to blame?”

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