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LinkedIn Corp. focuses on growth in China

LinkedIn – the one major U.S. Social network not blocked in China – has announced that it started to expand its presence on the largest market in the world.

Unlike Facebook, Twitter and Google, LinkedIn is not banned by state censors in China. George Shen, who is the companys first president for China, has been appointed recently and shortly after that the company started to integrate its accounts with users profiles on the Chinese chat application WeChat. The latter has around 300 million users on a monthly basis.

LinkedIn is said by some Internet analysts and recruiters that it has better chances of catching on in China than many other U.S. technology companies. The problem that most companies, if unblocked, have to deal with on the Chinese market, is that they immediately face the competition of some already established technology giants, such as Tencent, Sina, or Baidu and Youku Tudou, which lead in search and online video.

As reported by the Financial Times, currently the online job hunting market is divided between some local groups such as Zhaopin and 51job, and a very high turnover rate among employees means high demand for recruiting services. One of the young employees of LinkedIn in China said for the Financial Times: “The quality of companies that hire through Zhaopin or 51job varies greatly. LinkedIn is more international and higher end.”

It is not yet clear why China has not showed any intentions of blocking LinkedIn along with other foreign social networks, such as Facebook and Twitter, for example. Some Internet analysts say the fact that the websites users do not typically use it to debate politics or organize protests, is responsible for not drawing any unwanted attention from the censors.

Currently, LinkedIn does not offer a complete version of its desktop site in China, but it has reported more than 4 million users in the country. Globally, its members are 260 million, 54 billion of whom are in Asia. The company has reported that membership growth rate on its home market has started to slow down, because LinkedIn has already covered much of its potential urban-base.

One of the analysts working for Canaccord Genuity – Michael Graham, said for the Financial Times: “They need new markets to keep the whole thing going.” This is exactly why the company and most analysts consider China as such market. Most recruiters say that Chinese people feel comfortable with changing their jobs after just two to three years, which is a lot faster than the employees in the U.S. or in Europe. This is benefited by the rising salaries and relatively stiff competition among companies for trained staff.

LinkedIn refused to elaborate on what its new president in China – George Shen – plans to do for the website. Including languages such as Bahasa Indonesia and Turkish is considered to be one of the potential ways for the company to grow. Currently, the Chinese-language functionality of LinkedIn is limited to the companys mobile application.

According to CNN Money, the current share price of LinkedIn Corp. is 1.32% up, and its one-year return rate is 0.75% down. The 32 analysts offering 12-month price forecasts for LinkedIn Corp. have a median target of 272.50, with a high estimate of 300.00 and a low estimate of 214.00. The median estimate represents a 26.62% increase from the last price of 215.21.

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