Call of the week: Facebook likely entering China next year

Facebook (FB) could finally have access to the more than 700 million internet users in China, and that’s Yahoo Finance’s call of the week.

Mizuho analyst James Lee wrote in a note to shareholders this week, “During our recent China trip, our meetings with various industry contacts indicated that FB could have a realistic opportunity for entering China next year.”’

Here’s why it’s such a big deal. Access to China’s rapidly growing internet population could greatly boost Facebook’s business. According to a report from The China Internet Network Information Center, the country’s internet population has soared about 433% over the past 10 years, with more than a half of its population online.

34 PHOTOS
Facebook over the years
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Facebook over the years

The original Facebook homepage from 2004 with a small picture of Al Pacino in the top left corner.

Photo courtesy: Max Slater-Robins/WayBack Machine

Mark Zuckerberg originally described himself as not only the founder of Facebook, but also as the "Master and Commander" and "Enemy of the State."

Photo courtesy: WayBack Machine

Here's what a Facebook group page looked like in 2005.

Photo courtesy: WayBack Machine

For comparison, this is what a Facebook group page looks like today.

Photo courtesy: WayBack Machine

The Facebook homepage in 2005 also listed all of the schools the social network was in -- and still included the photo of Al Pacino.

Photo courtesy: Max Slater-Robins/WayBack Machine

The company decided to drop the "the" from its name in 2005, after it bought the domain Facebook.com for $200,000.

Photo courtesy: WayBack Machine

We love this gem about "poking" from one of the original FAQ pages.

Photo courtesy: WayBack Machine

Facebook's homepage in 2006 was a stripped-back affair, doing away with the list of schools in favor of a simple login option.

Photo courtesy: Max Slater-Robins/WayBack Machine

Mark Zuckerberg's profile in 2006.

Photo courtesy: WayBack Machine

Facebook launched the News Feed to display all your friends' activity in a single timeline in 2006.

Photo courtesy: WayBack Machine

At the same time, Facebook introduced the Mini-Feed. But the entire concept of a News Feed resulted in some very public outrage. Some users even went so far to call one of Facebook's product managers the devil.

Photo courtesy: WayBack Machine

Facebook's 2007 homepage contained the first instance of its now-synonymous logo and offered the "latest news" from friends.

Photo courtesy: Max Slater-Robins/WayBack Machine

The Facebook of 2008 continued to refine the homepage and offered options for signing up.

Photo courtesy: Max Slater-Robins/WayBack Machine

Facebook gained the "connected world" diagram in 2009, which lasted all the way until 2011.

Photo courtesy: Max Slater-Robins/WayBack Machine

In 2009, Facebook's home page also got a facelift. Posts started to stream through the News Feed in real-time.

Photo courtesy: WayBack Machine

That same year, Facebook also introduced its algorithm for determining the order in which status updates should be displayed.

Photo courtesy: WayBack Machine

Facebook changed its logo font in 2010 but left the homepage much the same.

Photo courtesy: WayBack Machine

2010 was also when Facebook brought notifications to the top navigation bar following yet another redesign.

Photo courtesy: WayBack Machine

Facebook also rolled out a new, more visual profile in 2010. It added a row of recently tagged images below your name and basic profile information.

Photo courtesy: WayBack Machine

Facebook left the design the same in 2011, but made the input boxes used to log in clearer.

Photo courtesy: Max Slater-Robins/WayBack Machine

Facebook launched the News Ticker in 2011 so users could keep up with their friends while browsing through other parts of Facebook.

Photo courtesy: WayBack Machine

The Facebook Timeline feels like it's been around since the beginning. But it launched in 2011 to act as a virtual timeline of your entire life.

Photo courtesy: WayBack Machine

Facebook also split its instant messaging into a different app called Messenger in 2011. It's now got more than 800 million monthly users.

Photo courtesy: iTunes

Facebook swapped out the connected world diagram for a phone in 2012 as its users moved from desktop to mobile. Today, over 800 million people access Facebook on mobile everyday.

Photo courtesy: Max Slater-Robins/WayBack Machine

Facebook started flooding the News Feed with sponsored stories in January 2012.

Photo courtesy: WayBack Machine

Facebook settled on a design in 2013 that it would stay with for the next few years.

Photo courtesy: Max Slater-Robins/WayBack Machine

This is what Facebook's mobile app looked like when it first launched.

Photo courtesy: WayBack Machine

It has since been completely redesigned.

Photo courtesy: WayBack Machine

Facebook also owns a bunch of other popular apps, most notably Instagram, which the company bought for $1 billion in 2012. With more than 400 million monthly users, that seems like a steal nowadays.

Photo courtesy: Business Insider

2015 was a big year for Facebook that saw its first ever day with one billion users online simultaneously. The company had figured out how to make money from mobile too, turning it into a $300 billion business.

Photo courtesy: Max Slater-Robins/WayBack Machine

Today, more than 1.5 billion people use the social network every single month.

Photo courtesy: Facebook

And more than 1.4 billion people use it on their mobile phones every month. Not bad, considering 12 years ago smartphones didn't even exist.

Photo courtesy: Facebook

Here's the Facebook homepage today, on its 12th birthday.
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So why does Lee think Facebook could gain access to China as early as 2018? Chinese President Xi Jinping is entering his second term in office in November, and according to Lee, “media scrutiny and sensitivity are much less during an administration’s second term.” He also highlights the recent approval of LinkedIn and Airbnb, Facebook’s decision to hire a Beijing-based government relations executive, and says its current approach of helping Chinese advertisers sell ads overseas “appears to be aligned with Chinese government’s policy to globalize local companies.”

Just think how much bigger Facebook could get if it has access to China’s 1.4 billion population. The company already has a market capitalization of $494 billion, making it the fourth most valuable company behind only Apple (AAPL), Alphabet (GOOGL) and Microsoft (MSFT).

If Lee is right and Facebook gets approved to do business in China, he thinks the company “will likely operate an Instagram-like app, for photo and video sharing or VR-gaming platform through Oculus.”

Shares of Facebook were last trading down 0.9% at $169.61 per share on Friday.

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