Microsoft will Shut Down LinkedIn from Chinese Market
American technology giant Microsoft has announced that it will shut down the localized version of the professional social network LinkedIn from the Chinese market later this year. Microsoft purchased LinkedIn for more than $26 billion back in 2016.
The news comes amidst a flurry of regulatory changes in the Asian nation, as well as rising tensions between the company and the country. Two weeks past, Microsoft came under heavy scrutiny for its decision to block the profiles of certain U.S. journalists in China.
In its blog post announcing the move, the company also revealed a plan to launch a new China-only standalone product called InJobs, Microsoft did not directly reference those reports. Instead, it said: While we’ve found success in helping Chinese members find jobs and economic opportunity, we have not found that same level of success in the more social aspects of sharing and staying informed. We’re also facing a significantly more challenging operating environment and greater compliance requirements in China.
The company is not the only American enterprise to find it hard to balance the authoritarian demands of the Chinese government and its own business goals. Microsoft has taken a sharp approach to a problem that likely would have only become exacerbated over time; the software giant could choose to either bow to the demands of the Chinese government to limit access of individual profiles it found unacceptable or walk.
In a blog post discussing the news, LinkedIn wrote that the company described its 2014 decision to enter the Chinese market, which meant “adherence to requirements of the Chinese government on Internet platforms” despite it also “strongly support freedom of expression.”
But LinkedIn wrote that it is now “facing a significantly more challenging operating environment and greater compliance requirements in China.” That changed market landscape led to the company making 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.”
Shares of Microsoft are up around 1.6% in morning trading, up roughly as much as the technology-focused Nasdaq Composite index. Investors are shrugging off the news, in other words. It is not clear what the decision will mean for Microsoft’s relationship with the Chinese market and state is at this juncture. The Chinese Communist Party has been making changes in its domestic cloud market that could limit its commercial future for foreign companies.